Holding On

Jul 10, 2008 by

The market is going for a wild ride, but I have decided to hold my positions. As I’ve created a portfolio that is relatively broadly based, it will hopefully recover as the global markets recover. I have made investments in the economies of the United States, the European Union, Latin America, and Asia. Despite all of the diversification, it is becoming growing clear to me how strong the entire world is connected. A downturn in one market tends to be correlated with a downturn in another. Likewise, the upturns are correlated as well. This likely has to do with the large amount of trade that occurs between nations.

For instance, the FTSE/Xinhua China 25 Index seems to have similar inflection points to the S&P 500:

 FXI vs. IVV 3 Months

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