Major Assets Movement Bodes Well With The Favorable Season
12/06/2010 0 comments
Major asset classes' return performance provides insights into asset movement. It plays an important role in a tactical asset allocation strategy such as MyPlanIQ Tactical Asset Allocation. This is a report for the week ending on 12/03/2010. More details can be found in MyPlanIQ 360 Degree Market View.
The latest stock market rally bodes well with one of the strongest seasons for stock markets. It is well documented that stocks tend to do well in year end: the so called Santa Claus rally.
Gold (GLD) and broad based commodities (GSG or DBC) made strong upward move and are now among the top five assets that have the highest trend scores. US REITs (IYR) continued its relative weakness while international REITs (RWX) outperformed its US counter part and took the top fourth place, this was partly due to the dollar weakness.
| Assets Class | Symbols | 12/03 Trend Score | 11/26 Trend Score | Direction |
|---|---|---|---|---|
| Frontier Market Stks | FRN | 13.33% | 14.18% | v |
| Emerging Market Stks | VWO | 11.67% | 7.85% | ^ |
| Gold | GLD | 11.1% | 7.74% | ^ |
| International REITs | RWX | 10.73% | 7.15% | ^ |
| Commodities | GSG | 10.22% | 4.61% | ^ |
| US Stocks | VTI | 9.57% | 7.64% | ^ |
| US Equity REITs | VNQ | 9.21% | 10.71% | v |
| International Developed Stks | EFA | 6.94% | 3.67% | ^ |
| US High Yield Bonds | JNK | 4.81% | 4.05% | ^ |
| Emerging Mkt Bonds | PCY | 3.14% | 3.45% | v |
| Intermediate Treasuries | IEF | 1.03% | 2.34% | v |
| International Treasury Bonds | BWX | 0.97% | -0.15% | ^ |
| US Credit Bonds | CFT | 0.94% | 2.06% | v |
| Total US Bonds | BND | 0.59% | 1.05% | v |
| Treasury Bills | SHV | 0.03% | 0.02% | ^ |
| Mortgage Back Bonds | MBB | -1.8% | 1.55% | v |
| Municipal Bonds | MUB | -1.81% | -1.1% | v |
The riskiest assets: Frontier Market Stocks (FRN) and Emerging Market Stocks (VWO or EEM) dominated the top two spots. Gold (GLD) had a big recovery last week, approaching all time high again.
In conclusions, in the bigger uncertain context, we are now entering a favorable season for risk assets. A portfolio that has been positioned well will be able to take advantage of such an event.
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