Vicious Volatility

On days like today when stocks, bonds, precious metals, commodities and emerging markets all fall, portfolio diversification, doesn’t help. Remember that. Separately, financial markets have wiped out all of May and June’s gains not because QE3 will end, but because participants are unconvinced that the economy can withstand higher interest rates without slowing. And that will hurt household spending and ultimately corporate earnings. I’m diversifying into booze.