I spent a bit more time yesterday talking to clients than usual–a situation common to many advisors in this crazy environment. So far, the Dow has gone from down 300 points to about 130. It's likely that these intraday gyrations are more psychological than based on real fundamentals.
We are certainly facing some economic headwinds. We believe that fears of a slowdown put commodities at risk of a drawdown, especially the energy sector. Precious metals may also see some additional selling, but lower rates would augur for flat to higher gold prices.
I've spoken before about the need to shore up the balance sheet of the middle class now that the banks are in better shape. But with the government simply out of options both fiscally and monetarily, perhaps the best strategy to take is to "follow the money."
