The consolidation phase for equities appears to be reaching an end, causing Credit Suisse to reverse part of a tactical downgrade from February and take equities to 2 percent overweight on a one- to three-month basis. That rate would be increased if the markets fell further or the outlook for China became clearer.
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This report by the World Economic Forum looks at the strategic importance of long-term investing for financial stability and the role of wealthy families as long-term investors alongside institutional actors such as sovereign wealth funds, endowment foundations, pension funds, and other entities.
This summary report of the second quarter provides a high-level view of global economic data as well as global and U.S. economic trends. In addition, it examines individual market segments, including U.S. fixed income, U.S. equity, global equity, international equity, hedge funds, private equity, and real assets.
To achieve lower borrowing costs and longer payment schedules for bond-issuing eurozone countries, bond alchemists (or policymakers) must ensure that the banks holding periphery bonds don't suffer significant losses, that the issuing countries can return to the markets, and that investors are confident the countries won't default.
Investors buy gold out of fear that the economic and political infrastructure we count on when we buy stocks and bonds is degrading. And gold booms inevitably end with a bust. The better strategy may be to build a reasonably sized position in diversified commodities, including gold; play close attention to sound entry points; and rebalance religiously.
Concerns about excess government debt and inflation have increased interest in gold and raised its price. Gold is a commodity that behaves more like a currency, providing no investment return beyond price fluctuation. Gold's high price undermines its protective characteristics, making it more vulnerable to declines as monetary policy normalizes.
Several mega-trends point to significant growth in the energy sector. These include the development of unconventional reservoirs; the increasing service intensity of finding, developing and producing oil and gas; the exploration and development of ultra-deep water and other frontier areas; and the monetization of stranded gas resources worldwide.
As the balance of growth shifts from developed to developing nations, the world clamors for natural resources. Land capable of satisfying that demand can help investors reduce portfolio volatility and protect principal while providing steady income or appreciation as well as a hedge against inflation.
At the 2011 FOX Wealth Advisor Forum, a FOX executive reviewed the top trends contained in the current FOX Wealth Trends™ and discussed the findings with two leading wealth advisors who explained how they see the trends manifesting themselves in their practices.
While political upheaval in the region is a legitimate concern for investors, the tumult provides an entry point into what may become an increasingly important market. Economic fundamentals are strong, the regional GDP is improving, and governments are supporting programs and infrastructure to facilitate growth.