I've been flinching since last month but the blow didn't come til this week. The stock market took a beating this past week, and I was fortunate to have put myself in a safe place before it happened. Well, relatively safe. My 5-year cyclical safety portfolio has been losing half of what the S&P 500 has been losing, which is comforting considering it still has some dividend help, but I made a bad decision on keeping some real estate. Overall, I've lost the majority of my gain since two months ago, but it wasn't much to begin with. The bulk should still come from dividends and long-term growth.
On my trading portfolio, I put myself in a very safe place with international stocks and the Brazillian index, but putting money on gold as a hedge hasn't worked out. The problem is that the market is not falling on inflation data or other economic symptoms. Rather it's a adverse reaction to the end of cheap money, the credit that's been fueling leveraged buy-outs and sub-prime mortgages. In this situation, it's a general aversion to risk and credit, and therefore gold suffers as well.
Other than that, I've been doing very very well this year. However, my inclination is that the stock market is going to get worse before it gets better. The fact that the market pierced its trendline so fiercely without any sign of a let up by Friday is not good. There aren't too many safe spots to stand at the moment.