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Gold, bitcoin neglect to defend investors against Thursday’s stock market meltdown

  • Despite Thursday’s stock market plunge, non-traditional and traditional hedges like yellow and bitcoin were not immune from the sell-off.
  • Technological innovation stocks led a steep sell-off in the industry, with the Nasdaq hundred index down as much as 5.5 % in Thursday afternoon trades.
  • Gold traded down as much as 1 %, while bitcoin fell six % on Thursday.
  • Often, investors appear to these non traditional assets to offer protection during stock market sell-offs.

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Technological innovation stocks led the marketplace decline, with the Nasdaq 100 index down pretty much as 6 %. Mega-cap tech winners like Apple, Microsoft, and Amazon fell eight %, 7 %, and six % respectively.

Meanwhile, the S&P 500 fell as much as 4 %, while the Dow Jones industrial average fell more than 1,000 aspects for a loss of three %.

The high technology-driven sell off in the stock market spread to traditional and non-traditional profile hedges as yellow and bitcoin.

Gold fell almost as 1 % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell pretty much as 6 % to $US10,455.

Both gold and bitcoin have recently been bid in place by investors worried about the developing balance sheet of the US Fed and its recent policy overhaul which will probably result in increased levels of inflation.

Last month, gold touched all-time highs during $US2,089 an ounce, while bitcoin arrive at a multi-year high of $US12,473.

Investors generally look to both gold as well as bitcoin as a hedge to inflation, deflation, and falling stock prices because of their historically low correlation to equities.

But that historical correlation did not play out on Thursday.

One particular classic asset category which did provide protection to investors from Thursday’s promote sell off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up as much as 0.20 %.

For all of the talk with Wall Street analysts that the favorite 60 40 investment portfolio which balances stocks and bonds is actually “dead,” it’s alive and well today.

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