Gyroscopic Investing

Looking at today's grim stats for stocks, LT bonds and gold, I am gaining new respect for St. Harry B's 4x25 portfolio.

Harry did say cash would be our savior during recessions, when all the other sectors were looking like the south end of a north-bound mule. Keep your powder dry, fellow PPers.

And to think cash used to be my most hated sector of the PP.

Last trading day of the month. Treasuries are not moving up in response to the decline in equities. Bonds will sell off and equities will close near 16900. Gold is anyone's guess. The above prediction is too.

I hold a significant amount of cash. Problem is it's yielding almost nothing.

Today is rough. Glad I'm holding some cash. Before discovering Harry and Craig, I wouldn't have.

Hey, aren't you three posters all relatively young? A few more days like today and you'll have yourself a buying opportunity.

One thing that I wonder about with money flowing between assets is the relative size of the markets for LTTs, gold and stocks. For example, I assume the dollar value of total stock investments is much higher than it is for all the gold in the world but I don't really know that. The argument is generally that $ has to flow somewhere, but if the markets are drastically different in size a drop in one asset may not mean a corresponding rise in another. Probably should be another thread, I guess.

Don't forget that $ can flow to cash also.  So, when you see stocks falling, that doesn't mean that gold or bonds are going to be rising.  Also, there are plenty of other places for $ to flow, such as commodities other than gold.

True enough, Stuper1, but I still think the question is a valid one if one subscribes to the basic idea that money flowing between assets in the PP causes prices of one asset to rise as prices of another fall. I don't know what figures to trust but a quick search online shows world equities valued at about 55 trillion and the total value of all the (above ground) gold to be around seven trillion. Seems like the bond market is even bigger than the stock market but I can't find any figures for how much of it is outstanding LTTs.

I keep on paying cash!!!