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IBDvalueinvestin (99.64)

DJIA down nearly 400 points since US Default scare started.

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July 28, 2011 – Comments (0) | RELATED TICKERS: SPY , VXZ , QQQ

Reports of a US default have people selling out their equity holdings and or buying VIX ETF's because there has been numerous reports suggesting to hedge against a US default by buying VIX ETF's.

 

Is this a good idea? Well if you read the just the headline it sure would seem like a good idea.

If U.S. Defaults, Stocks Fall 30%, GDP 5%: Credit Suisse- CNBC 

 

Problem is people are selling or buying one set of equities on hopes of a US default and one should not buy or sell on hope but rather on which case has a higher probability of occuring.

Now may be a good time to re-enter the equity market as I believe that an agreement will happen especially given the dire consequences of -30% stock market correction if its not done.

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