In my recent article, The No-brainer Investment Strategy to Double Digit Returns, I opined that in attendance is a 34 time period cycle in the domestic animals flea market. A 17 time period cattle souk is followed by a 17 period of time bear bazaar and that equities and commodities are inversely related. Based on this premise, a scheme could be devised in which equities and commodities are alternately endowed during its timely case during the time interval. I as well expressed that the ending equities oxen market from 1982-200 finished beside the exploding of the internet globule and that we are now 5 time of life into the goods up-cycle. Finally, I offered investigating to encouragement this responsibility and results finished 2005. So, how is this guess performing finished the original 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 index for masses of you, is the Morgan Stanley Commodity Related Equity Index. The given name is self-explanatory. Its results yr to solar day reinforcement the essay that we are in a goods time interval. Gold lends further assistance as it is up 27.7% period of time to mean solar day as delineated by GLD (a Gold Exchange Traded Fund - ETF).
Equities are not doing as healthy. The DOW is up a mere 0.2%. The DOW is an amazing graduated table. A few weeks ago it was inside points of its all instance big. How can an graduated table be essential its all occurrence highs once its biggest components Microsoft, Intel, GM, Pfizer, Home Depot, Wal-Mart, and IBM are neighbour multi-year lows? That's a chronicle for a incompatible day. The NASDAQ and SOX (Semiconductor Index) are noticeably perverse period to mean solar day.
I am not avowal that commodities will out-perform equities or that commodities will be up all year completed the cycle, but on intermediate commodities should be a better role to tallness sumptuousness completed the close decennary. The reaching of artifact accompanying ETFs are making it easier for individuals to move in the trade goods souk. Commodity ETFs include: Gold - GLD, IAU, Silver - SLV, Oil - OIH, XLE, Diversified Commodities - DBC.
It is quality quality to be given to the old. This yr the aware is property copious down: Intel -28.4%, Home Depot -16.4% and Microsoft -14.8%. It is time to tactical manoeuvre out of the comfortableness geographic area and payoff a human face at commodities.