Kaizen Wealth Management » Asset Classes

2010 – The Year in Review

Kaizen Wealth Managment — Mon, 03 Jan 2011 17:22:19 +0000

Commodities and emerging market equities outperformed. Commodities did well due to investor demand, a weaker Dollar, and the continuing emerging markets growth story. U.S. equities performed better than many expected, beating developed international equities and the broad bond market.

Source: Standard & Poor’s, Barclays Capital, MSCI, Reuters/CRB, J.P. Morgan Asset Management

Falling Dollar Fuels Returns on Foreign Assets

Kaizen Wealth Managment — Mon, 08 Nov 2010 17:19:15 +0000

Many variables can fuel the performance of commodities and international stocks. Over the past 10 years, according to JP Morgan, a 1% drop in the Dollar has been associated with a 1.4% increase in Dollar-denominated commodity returns (CRB), and a 2.4% increase in international stocks (Dollar-denominated MSCI ACWI Ex-US). If Fed purchases and/or slow U.S. economic growth continue, which may be negative for the Dollar, investors could look to international stocks and commodities for opportunities, or to hedge their portfolios.

Source: JP Morgan Asset Management

Interest Rates…How Low Can You Go?

Kaizen Wealth Managment — Tue, 26 Oct 2010 16:32:16 +0000

This chart shows the yield of the 10-year U.S. Treasury from 09/30/1980 through 09/30 of this year. It is split by 10-year intervals showing the annualized return due to a decline in rates. But, rates cannot fall below zero. It may be a good time to evaluate fixed income allocations.

Source: J.P. Morgan

Gold Prices Have Spiked Before

Kaizen Wealth Managment — Mon, 18 Oct 2010 15:24:55 +0000

With economic and market uncertainty on the mind of investors, gold prices have rallied from $450 to over $1,300 in the last 5 years. But, unlike most commodities, gold has no true economic value beyond niche products such as jewelry, therefore the driver in its price is what the next person is willing to pay for the shiny yellow metal. This is impossible to predict. While gold could certainly climb higher in the near-term, history suggests caution as gold has fallen just as rapidly as it has recently risen.

Source: J.P. Morgan

Going with the “Flows”

Kaizen Wealth Managment — Wed, 29 Sep 2010 15:10:50 +0000

Source: J.P. Morgan Asset Management

U.S. Money Market Flows

Kaizen Wealth Managment — Wed, 29 Sep 2010 14:59:24 +0000

Source: Morningstar

Do hedge funds hedge?

Kaizen Wealth Managment — Fri, 04 Jun 2010 16:02:11 +0000

…the experience of the Great Recession

{click to open}

Source: Vanguard | 06/03/2010

The recent Great Recession provides a unique opportunity to examine the experience of hedge fund investors. Many investors believe that hedge fund managers have the flexibility to avoid the disastrous consequences of extreme market events. However, during the turmoil of the past few years, most hedge fund categories, on average, did not provide significant diversification beyond that of a 60/40 portfolio of stocks and bonds.

Opportunities in International Investing

Kaizen Wealth Managment — Mon, 21 Dec 2009 16:40:25 +0000

More and more, we are finding it easier to justify our higher allocations to international equities. Roughly 55% of the investable equity universe, by market cap, is outside of the U.S. Also, world GDP has outpaced the U.S. GDP every year this decade; moreover, emerging markets have seen average GDP growth since 2000 of 5.9% – compared to 1.8% for the developed economies. International investing may also be a hedge against a weaker domestic currency.

source: J.P.Morgan Asset Management

Bubbles…Is Gold next?

Kaizen Wealth Managment — Tue, 08 Dec 2009 16:25:12 +0000

The WSJ recently published a chart that we thought was worth examining, and then noting here. The chart draws an excellent comparison between the recent surge in gold prices to previous bubbles of the last decade, giving us a cautionary perspective for those pouring money into gold today:

20-year Annualized Returns by Asset Class

Kaizen Wealth Managment — Thu, 05 Nov 2009 17:45:53 +0000

20-year period ending 12/31/08.

S&P 500 Index = 8.4%
Average Investor = 1.9%
The culprit = Investor Behavior

source J.P. Morgan Asset Management