The CAGR for equity for the last 20 years is 7.8%. Equities outperformed investment-grade corporate bonds. Equities are the best performing asset class.
The risk-return metric for ten-year Treasuries (IEF) are lowest, but also the safest, with a paltry 1.3% volatility and with an average yield of 4.1%.
High yield bonds (HYG), which are usually issued by mid- and small-cap companies, are considered riskier than investment grade corporate bonds.
The first-time homebuyer may finally be awakening The Great Recession was not kind to the Millennial generation. The biggest challenge was a lousy job market for recent college graduates. Finishing college with…
Sometimes the term “asset management” is also used to denote the upkeep of a plant, machinery, or equipment in order to generate better returns.
Driving through an oversupply situation in commodity markets is a waiting game. The commodity producers that can wait until the others fall out will win in the long run.
OPEC is insecure about losing market share. Despite a steep fall in crude oil prices, OPEC decided to maintain production levels in its meeting on November 27.
Currently, crude oil is the talk of Wall Street. OPEC accounts for ~60% of global crude oil trade. Crude oil consumption is spread across the globe.
So far, no major production cuts have been announced. As a result of lower iron ore prices, production won’t be viable for some producers. This will correct the oversupply.
With over 65% exports going to China, China is the real swinger in global iron ore prices. A slowdown in China caused panic among all major commodity exporters.
In 2011, floods in Australia led to a rally in met coal prices. The benchmark was as high as $330 per ton. China’s growth momentum was expected to continue for years to come.
In the seaborne met coal market, the swing producers are clearly the Australian producers. Australia is the second largest of the met coal producers. It’s the largest met coal exporter.
Commodities are homogeneous in nature. Simply put, met coal produced by Walter Energy (WLT) isn’t much different than met coal that’s produced by other producers
There’s mistrust in the global commodity markets. From crude oil to met coal and iron ore, producers haven’t cut production. They’re waiting for others to do it first.
Gold underperforms when the rising real rate decreases the gold’s attractiveness since investors would rather invest in more attractive bank deposits.
And it’s the latter that I’d be most cognizant of when structuring a portfolio heading into the New Year. As such, the big takeaway for investors from last week’s data…