Correction Day

So how is everybody's portfolio doing today? Are you feeling pain and nausea from the red paint all over your account statement? If yes, then don’t you worry, you’re not the only one out there. As of 9:09 a.m. my portfolio was down 2.2%. That’s almost my January’s entire gains wipe out in one day!

I’m not worried though, February had been stellar until now (up 5.93%), and I always brace myself for some big losses after a long winning streak.

For those who read my posting on February 1^st you can now see that I was right to be worried about Emerging Market’s valuation level. EEM is my biggest loser today, currently shaving 4.7% of its value after being down over 6% at the opening bell. By now everyone should know that China’s market had its biggest one-day lost in a decade (8.8%), and this is only the beginning. I think the decline can easily continue to -25% before it bottoms out, based on previous experience (in May of 06 EEM went down 27% from about $110 to just above $80).

To look on the bright side, this is only a correction (based on CNBC analyst’s opinion) and soon opportunities will present themselves in the form of under valued equity.

The one sector I remain bullish about is commodities, and most importantly gold. I think gold is on a strong up trend and we should see prices breaking its May of 06 highs of $732 pretty soon, probably within 6 months.

Good luck out there, and don’t let a set back hampered your enthusiasm for the equity markets.