Global markets are down in sympathy today as a sell-off in China has once again sparked a retreat across the board in most asset classes. The scorching growth rate in China (11.3%) was cheered, but a ramping inflation rate (3.3%) has investors on edge. The imbalances are played out in the currency and interest rate markets and a debate is once again rising to the forefront as what to do about the 800lb gorilla that is China. Analysis and dialogue will occur around us, but what matters right here right now is that most assets are down, and there is nowhere to hide. See the charts i've included here: GLD, FXI, and IWM and draw your own conclusions. So much for negative correlation and diversifying across asset classes in order to achieve investment success. Frankly, most talking heads stress this sort of diversification, but could it be passe? Something that worked 10 or 20 years ago doesnt mean it will work in the next 10 or 20 years. Be careful out there people, investing is not as easy as many people lead you to believe!
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