Zombie assets hope to return from the dead
As with most timeframes in the market, the laggards are a mix of surprising and obvious names (in hindsight, of course). This October, they stand out a little more than usual since so many asset classes are up this year. But they’re also down for their own reasons—not different versions of the same reason. So check over your shoulder when you pass a graveyard to see if assets as varied as natural gas, gold miners, Treasurys, and Mexico can rise from the dead and turn investors’ fright to delight. In any case, Direxion can help investors achieve their goals with a range of leveraged ETF products.
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Dynamic environment needs dynamic approach
As we discussed in earlier parts of this series, though broader markets are up globally, there are pockets of assets that are declining and providing subdued returns to investors. While gold (NUGT)(JNUG) is up this year, many gold miners are besieged by internal issues that have depressed their fundamentals and overall returns. Similarly, natural gas (GASL) prices are down over 20% this year, mainly affected by unfavorable weather forecasts apart from the usual factor of demand and supply mismatch.
Treasury yields (TYO)(TYD), after falling up to September, have started rising again on the renewed hope of higher economic growth and expectations of higher interest rates. Similarly, as the chart above shows, Mexico’s (MEXX) economic growth isn’t picking up as expected and is further aggravated by concerns relating to a possible failure of NAFTA talks. Overall, these laggards are expected to remain depressed in the near future, though any change in the situation could mean bumper returns to investors taking on higher risk.
In today’s dynamic environment, investors need to act swiftly and decisively to explore new opportunities. They must keep up with new developments while assessing the impact of different variables on asset classes. Alternatively, they can explore leveraged and diverse ETFs available in the market.