It's an ugly Monday morning open. Last Monday I suggested getting "mentally ready for more deterioration in equities and be happy to be wrong." So there has been more deterioration.
I understand not believing in holding first responder defensives but I think having some weighting to differentiated return profiles is crucial to build proper diversification. I've been on this train since before the Financial Crisis but now it is much easier to build out this small part of a diversified portfolio with more sophisticated products having hit the market over the last 15 years.
This event continues to be tough for managed futures, DBMF and KMLM as examples, which is why they are better thought of as second responders, more likely to protect against a longer slower decline.
We can't know where this event is going obviously but it has been pretty fast and fast declines have the tendency to snap back quickly once they are over....again though, we have no idea when this will be over and a tendency is not a certainty.
SH, BTAL, GLDM, CBOE and NOC are all in my ownership universe, DBMF and KMLM are not. And FWIW, staples are higher today too which like the other day makes sense as a somewhat defensive sector but that could be more about the drop in treasury yields today because also like the other day, REITs appear to be higher too.
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