Do Commodities Belong In Your Portfolio? | reebokjerseynfl.com

Copyright 2006 Rafael Velez Although it may sound frightening and risky to many investors, if handled correctly, commodities could be the missing piece of an investors portfolio. What exactly are commodities? Commodities are any mass goods traded on an exchange or in a cash market including: cocoa, coffee, eggs, lumber, orange juice, soybeans and sugar just to name a few. Industrial metals are also included with copper, aluminum, zinc, nickel, silver, and lead ranking among the most popular industrial metals holdings. Finally, the most widely followed commodities include oil, natural gas and gold. The diversification benefits equal or surpass those of other asset classes like fixed income and real estate. The primary reason for this is their correlation, or lack thereof, to the stock market as represented by the S&P 500 (Correlation describes how similar the price movement is between two investments). Commodities have historically exhibited absolutely no correlation to the stock market or any of the bond market indices. In fact, they have a negative correlation. This non-similar pattern of performance allows an investor to minimize volatility and protect capital in down markets. Overall, these factors help to decrease overall risk in a portfolio of investments. In short, commodities have historically been a good compliment to a traditional stock, bond and real estate portfolio. When lv handbags commodities are utilized as a stand-alone investment, commodities are relatively volatile, exhibiting wild price swings. At times, they are also illiquid, prohibiting the investor from exiting a position that is dropping rapidly. Another factor to be aware of when investing in commodities is the unusual income taxation. Most notably, investors are taxed each year on their share of the profits, if there are profits, regardless of whether the investment has been sold. This is a significant disadvantage compared to investments in stocks, because one does not pay income taxes until the stock is actually sold. Finally, fees to implement a commodities strategy are significantly higher than for those of traditional mutual funds, for example. For these reasons, it is best to only consider 5-20% of ones portfolio for this strategy. At a time when stocks and bonds are predicted by most academics and investment gurus such as Warren Buffet, Bill Gross of PIMCO, and Jeremy Grantham of Grantham, Mayer, and Van Otterloo, to produce 5.0% returns or less over the next decade due to historically high market valuations. On a historical basis, commodities are inexpensively priced and substantial upside potential is possible. U.S. inflation is historically low right now but with the effects of massive fiscal, monetary policy and already robust consumer spending, raw goods prices will inevitably increase. cheap Chanel handbags for sale When they do, commodity indices will follow. As inflation gradually rises in 2006 and beyond, industrial metals prices will rise as investors begin to direct large amounts of money into these hard asset commodities. The high correlation between commodities and inflation provide an important hedge against considerable losses in traditional financial instruments such as stocks and bonds. In his recent book Hot Commodities, author and renowned cheap gucci handbags for sale investor Jim Rogers summed it up this way: The 1980s and 1990s saw a bear market in commodities. Prices had fallen to levels (adjusted for inflation) not seen since the Great Depression. For 130 years, stocks and commodities have alternated leadership in regular cycles averaging 18 years. The long bear market in commodities has created a sharp reduction in capacity and thus large supply-and-demand imbalances. As economies in Asia continue to grow, there will be a strong worldwide demand for all commodities. Historically, the prices of commodities show a negative correlation to the prices moves of stocks, bonds and other financial instruments. Commodity prices can rise even when the economy is stuck in reverse and their returns outpace inflation. The U.S. Federal Reserve and other banks in the world have been pursuing a policy of debasing their paper currencies. The U.S. Federal Reserves policy of monetary stimulus and rapid credit expansion will continue to push up the prices of hard assets such as precious metals and other commodities. History shows that war and political chaos only push commodities prices higher. Commodities also provide a tactical play on the current weakness in the U.S. Dollar. As other currencies such as the Euro and Yen appreciate versus the dollar, foreign buyers can buy less goods with the same amount of currency. This artificially increases demand, and subsequently drives up the prices of commodities. Currently, effects of this phenomenon can be seen best in the gold and silver markets as prices have risen dramatically over the past year. Commodities provide a play on globalization by their ability to aid in the improvement of the global economy. This is due to the fact that prices for industrial materials will increase as demand for industrial goods increase. As countries such as China and other emerging market economies develop, they will require more raw materials. This is especially true for industrial metals. China continues to develop at a rapid pace and consequently, their demand for raw materials continues to rise. In fact, Chinas iron ore demand has increased from 5% of the worlds supply to almost 50% over the past twelve years. Commodities have proven to be excellent investments over the last few years. There are a number of types of investment vehicles to take advantage of MBT Shoes Article - 613 - MBT Sneakers: The Basic Strategy to ... this great diversification play. Many of our client portfolios have benefited from this recent performance. With only small allocations to hard assets, most client portfolios have delivered returns that were twice the performance of traditional stock and bond portfolios. Many experts agree that U.S. stocks and bonds will, in all likelihood, generate significantly lower returns over the next decade. Commodities on the other hand may have the potential for the highest returns since the 1970s due to a worldwide economic expansion especially from emerging market countries.

[m2ag5zut00hh]

| Back to logs list

22128619 2010 年 12 月 30 日 15:06 Reading (loading. ..) Comments (0) Category: Car Information
2010 year is the With China's rapid economic growth, the automotive industry not only further consolidated the position of the world's largest car market, while more integrated into the global automotive industry revolution. In this excellent In a series of policy adjustments, China's auto industry will usher in the
★ policy to stimulate the production and marketing high
event: This year,mens timberland boots, China's auto production and sales almost every month has maintained steady growth of 30%. China Association of Automobile Manufacturers expects China car sales this year expected to reach 18 million, an increase of 32%. This means that in fact, the second consecutive year China will surpass the U.S. in the production and marketing data, and to break the U.S. record of 17 million had the highest sales record. It is predicted that China's auto sales in 2015 will reach 25 million, accounting for 30% of world vehicle production.
Comments: With the stimulation of automobile consumption in a series of policies were introduced, greatly boosting the end of new car sales. China's auto market is largely The long term, China's auto market still has great potential recognized.
★ brands suffered in the crisis years
events: the situation of strong sales last year, so a lot of car prices in 2010 developed a bold marketing tasks, while the automobile market in mid-2010, four months of consecutive decline in production and marketing chain has forced them to less than historical. BYD Auto in particular, be exposed because the sales task is too large, Yaku serious, leading to dealers a Then BYD Auto was first announced on August 3 to reduce production capacity, production and sales target for 2010 adjusted by the 80 million units to 60 million. Followed by Warren Buffett and Bill Gates came to China BYD timely momentum to become the most talked about events of the year 2010.
Comments: Looking back on the situation in the first half of car prices in half failing report card, especially independent brands, over sixty of the original car prices unable to complete the production and marketing plans. Relatively inexpensive, the network coverage is the characteristics of its own brand, but in the case of hot market blind expansion, lack of control of market risk, which is also its own brand in the disposal of weak performance during the crisis.
★ mergers and acquisitions to further deepen
event: revitalize the automobile industry in China last year after the introduction of planning policies, car makers pull this merger and reorganization of the big screen, while the 2010 China's auto industry, cross-regional mergers and acquisitions of domestic and further deepened.
May last year, Guangzhou Automobile Group acquired 29% shares of Changfeng Motor, the birth of the This year, Guangzhou Automobile Group will launch a tender offer of Changfeng, want to set up a joint venture with Mitsubishi Motors. Meanwhile, Guangzhou Automobile also through the acquisition of territory Gio vehicles will expand to east, and to the north of Shenyang Aerospace Mitsubishi acquisition. In addition, Beijing Automotive Group also obtained by recombinant methods, Guangzhou Baolong Group Co.,womens timberland boots, Ltd. all light vehicle stock of assets.
Comment: Following the curtain went up last year after China's auto industry restructuring, reorganization of 2010, More than 100 enterprises in China auto industry wants to become bigger and stronger, not through large-scale integration, restructuring is basically on paper, the deepening of inter-enterprise restructuring must be accompanied by the occurrence of pain, and will further increase.
★ eventually see the outcome of overseas acquisitions
events: from the hubbub last year, car prices overseas acquisitions finally see the outcome in 2010, Geely completed the acquisition of Volvo, and Teng Zeyi failed in the acquisition of the Hummer, GM announced the final release shutting down the Hummer brand.
8 On 2 August, Geely acquisition of Volvo closing ceremony in London, Ford Motor Company Geely Volvo completed the acquisition of business units, the total amount of 1.8 billion acquisition. So far, China's largest overseas private enterprise has completed merger proceedings, mergers and acquisitions after the success of Geely Group became the first multinational auto companies.
Comments: In recent years, the Chinese automobile enterprises to enhance their constantly looking for overseas acquisition opportunities, hope that overseas acquisitions to enhance their brand value to become a shortcut. From the time the acquisition of Ssangyong, Rover and Saab part of the assets, but now Volvo has become a sub-brand of Chinese enterprises. Than the original
★ usher in a new joint venture car prices climax
Event: With China becoming the world's largest automobile consumer market, more and more overseas auto giants could no longer resist the temptation of this huge market. This year, the domestic automobile joint venture group has begun to look for objects, BYD and Daimler, JAC will collaborate with Yang Rong R & D of electric vehicles; Changan in China, a joint venture with PSA marriage of the production of light commercial vehicles and passenger cars; Taiwan Yulon also Department of wisdom into China with Dongfeng truck satisfied Chi Jie, Guangzhou Automobile and Mitsubishi will also complete the new joint venture, a series of actions have become a big car groups to expand the scale of the new engine. In addition, domestic Subaru, Jaguar Land Rover's domestic plans are also a gradual manner.
Comments: With the rise of China's market position, many car companies are located in China continue to strengthen the urgency, more foreign auto companies have accelerated the pace of joint ventures, most of them choose the top four cars in China as a joint venture group object, in order to squeeze onto the Chinese automotive market high-speed speeding train.
★ joint venture to promote independent brand strategy
event: This year, the joint venture, have released their own brand, wants to seize the long-entrenched local brands of low-end market. Guangzhou Auto Show, China's first joint venture brands - Guangzhou Honda Concept (EVERUS) of the first production car officially unveiled the concept S1. On the same day, Nissan's own brand November 18, SAIC-GM-Wuling brands
the future of automobile industry
Comments: innovative strategies in national development, to encourage joint ventures engaged in their own brands under the baton to develop their own brands have formed a collective impulse, so the
strong global business in China is strong, multinational auto companies of all internal consensus. Melee in the Warring States to maintain and even further expand their business, joint ventures, product and market to move down into the low-end brand originally belonged to the local market.
★ listing car prices find a way out
Event: From IPO to the issuance, from the H shares to A shares, warrants from the issuance of bonds to the Chinese car prices is to further expand the financing channels. August 30, Guangzhou Automobile Group H shares in Hong Kong to achieve the overall market, as Guangzhou Auto was established in 2002 from the beginning of shares, Guangzhou Automobile Group, less than 8 years to usher in that day.
the same with Guangzhou Automobile, Lifan successfully landed on the Shanghai Stock Exchange shares A-share market, a landing A-share market's first private vehicle business. It is understood the FAW Group has a new idea of the overall market, Beijing Automotive Group's listing platform - BAIC shares have been taking shape, Chery, the public listing of Thai companies such as orderly.
Comments: With the rapid development of automobile industry and the increasing competition between car prices, financing capacity of the enterprise competitive car prices will become another battlefield. The aim at speeding up development of the automotive group, the bigger and stronger capital market, car prices have become an urgent need to achieve many strategic goals. Automobile companies in the private view, to solve their own financial pressures faced by the development, public finance is also a good way out.
★ Fostered by new energy vehicles set sail
event: a great new energy vehicles in 2010 to grow to Promotion of new energy vehicle demonstration pilot cities this year expanded from 13 to 20; subsidies are also in Shanghai,timberland outlet, Changchun, Shenzhen, Hangzhou, Hefei and other five cities launched a pilot project. Launched a new mainstream car prices collective energy car project, 16 central enterprises set up a Currently, BYD, and all the Thai electric cars are already sold to individual users, while the pure electric e6 also been put into operation in Shenzhen as a taxi, the major cities of the electric vehicle charging station construction has also begun to actively deployed.
Comments: According to the September release of In 2010, encouraged by a new energy policy, almost all the major car firms invest more effort in the development and promotion of electric vehicles, while the performance of independent brands will undoubtedly become the highlight of 2010.
★ Auto Recall intensified
event: accelerator pedal stuck due to security risks, Toyota recall vehicles over 3.46 million worldwide. January 28,timberland boots uk, recalled about 75,000 domestic-made RAV4. Following the hearing, the United States after March 1, Toyota President Akio Toyoda held a press conference in Beijing, bow and apologize to Chinese consumers. Toyota recalls occur, although not Started in 2010, but intensified during the year, fueling concern about the quality and safety for the car.
AQSIQ Defective Product Management Center Web site shows only 11 months, for a total of Changan Ford Mazda,timberland uk, Beijing Benz, 16 batches of 10 companies to implement the recall, involving over 60,000 vehicles,cheap timberland boots, most of which reasons are quality assurance measures in place due to quality control problems. The data also show that from January to November this year, the major automobile manufacturers in the domestic implementation of the recall of nearly one batch.
Comments: a model average of two days there was recalled. Behind a booming Chinese auto market, car quality is faced with severe challenges in 2010, is known as the Automotive quality Recall of events, showing car manufacturers on the quality of the high sense of responsibility, but in that sense while filling car market behind the veil of haze.
★ SAIC-GM co-create history
events: the 2010 Shanghai Auto and GM can be described as closer and closer. November 18, Shanghai Automotive Group Co., Ltd. announced that its wholly-owned subsidiary of Shanghai Automotive Co., Ltd. Hong Kong investors get 33 dollars a share placing of 15,151,515 shares of U.S. General Motors common stock, $ 499,999,995 total funding, about U.S. General Motors 0.97% equity.
In addition, the two sides are still the basis of new energy technology development and a new generation of automotive vehicles and other core areas of development to further strengthen cooperation and signed a strategic cooperation memorandum.
Comments: Shanghai Automotive and General Motors continue to deepen the strategic partnership for Chinese enterprises to enhance their R & D capabilities, expand overseas markets and so on out to provide a new model, also shows that car prices in China have the opportunity to change the pattern of world automobile .
(Beijing Youth Daily)