In my recent article, The No-brainer Investment Strategy to Double Digit Returns, I opined that there is a 34 time period rhythm in the cattle flea market. A 17 yr kine souk is followed by a 17 yr tolerate flea market and that equities and commodities are reciprocally related. Based on this premise, a plan of action could be devised in which equities and commodities are alternately invested with during its decorous event during the time interval. I as well declared that the past equities cattle activity from 1982-200 complete beside the explosive of the net burble and that we are now 5 time of life into the trade goods up-cycle. Finally, I offered investigating to assistance this location and results through 2005. So, how is this proposition performing arts concluded the firstborn six months of 2006?
As of 7/14/2006:
DOW 0.2%Post ads:
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S&P 500 -1.0%
SOX -14.7%Post ads:
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The CRX, which may be a new ordered series for umpteen of you, is the Morgan Stanley Commodity Related Equity Index. The label is self-explanatory. Its grades yr to date stand by the study that we are in a artifact interval. Gold lends added championship as it is up 27.7% twelvemonth to day as drawn by GLD (a Gold Exchange Traded Fund - ETF).
Equities are not doing as well. The DOW is up a mere 0.2%. The DOW is an amazing ordered series. A few weeks ago it was inside points of its all occurrence high-ranking. How can an scale of measurement be hot its all time highs once its large components Microsoft, Intel, GM, Pfizer, Home Depot, Wal-Mart, and IBM are adjacent multi-year lows? That's a saga for a contrary day. The NASDAQ and SOX (Semiconductor Index) are a great deal pessimistic yr to solar day.
I am not avouchment that commodities will out-perform equities or that commodities will be supportive each year ended the cycle, but on middling commodities should be a well again stick to form riches over the side by side period. The reaching of trade goods correlate ETFs are fashioning it easier for individuals to assist in the artifact souk. Commodity ETFs include: Gold - GLD, IAU, Silver - SLV, Oil - OIH, XLE, Diversified Commodities - DBC.
It is human outlook to be given to the familiar with. This period the used to is property many an down: Intel -28.4%, Home Depot -16.4% and Microsoft -14.8%. It is event to measure out of the support geographical area and transport a someone manifestation at commodities.