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The year continues to be very tough for almost every asset class, especially bonds and stocks.
The Bond Global Aggregate index is down by almost 15% YTD, while the S&P 500 fell more than 20% from the beginning of the year.
A more aggressive Federal Reserve has been the reason behind the drawdown of the last week. In an article on the WSJ it has been anticipated a surprising 75 bps rate hike, and the market quickly reacted with massive sales on bonds and stocks. The S&P 500 quickly broke a big support at 3,800.
Cryptocurrencies has been hammered too: during the weekend the Bitcoin fell below 20,000 USD, a level not seen since December 2020. It is now quite clear that crypto are more a risky asset and not really a way to decorrelate the portfolio.
Speaking about commodities, there are 2 relevant asset to mention: oil and gold.
Crude oil is still trading at high price, but basically it is in a range (95$-125$) from March 2022.
I think it will remain high for a while, so it may be worth to go long or to accumulate more when the WTI price will fall below $100.
Gold has been a boring asset in the last months, but at least it kept his value. A small exposure to gold contributed to lower portfolio volatility.
Now let’s see how portfolios are going.