Not-So-Safe Havens
After another chaotic day on Wednesday, the market is poised to close out one of its worst months in a long time on Thursday. Most investors will be eager for a fresh start in June. May has again been troublesome to investors, with most major stock indices falling by 5% or more in the U.S. and European equities experiencing significantly greater declines. With stock prices in free-fall mode, many investors who have been battered by the huge swings in markets are no doubt looking for places to ride out the storm. But if you're in search of a safe haven, exercise extreme caution: Some of your traditional options might not hold the appeal they once did.
Gold has long been a destination for investors expecting stock markets to hit turbulence; the yellow metal has a long history of skyrocketing when stocks slide. But that hasn't been the case so far in 2012, as the correlation between precious metals and stocks has strengthened considerably and investors seeking refuge in gold have been sorely disappointed. It took a mini rally in bullion prices on Wednesday to push the SPDR Gold Shares (GLD) into positive territory for the year. Gold has actually had a worse month than stocks. The GLD is down about 6% heading into the final session of May, while the SPDR S&P 500 (SPY) has shed about 5.6% of its value so far. ...320 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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