Yesterday I wrote a post that offered the advice that if you were uncertain about what will happen to the market if the election doesn't go your way you should protect yourself. I advised you that diversification and stop losses were possibly the best defense against a bad choice and might keep your portfolio from total disaster.
Several of you have asked if maybe a better approach might be to leave the stock market in favor of bonds. Below it that last six month of Vanguard's Total Bond Market ETF (BND) . This ETF holds 9,474 different bonds so at least you are diversified over the entire bond market
BND price vs Daily Moving Averages:
You might notice that the last six months have not been kind to the bond market and that just might continue in the near term.
My advice is still consider not selling but use rational stop losses. If the market goes your way, the stop losses won't trigger and you're a winner. If the market goes against you the stop losses can minimize your losses.
Be careful. Be rational.
On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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