Falcon Perspectives - April 2010
Investment Compass gives an insight into the investment decisions of our specialists.
Investment compass - April 2010
Investment Overview
The positive market trends continued in the first half of April, supported by increased signs of an economic rebound. The US consumer sector is recovering. The outlook for another good earnings season supported equities, too. So far, corporate earnings managed to convince investors. Fraud allegations against...
Investment Overview
Hard Assets
Hard assets are investments with an intrinsic value such as oil, gold, copper and other commodities, but also real estate. Thanks to their relatively low correlation to equities and bonds, hard assets provide investors with a valuable option to diversify their portfolios. The integration of hard assets in a security portfolio is suitable to enhance its return, while reducing risk at the same time. Portfolios including hard assets generally display better risk/return profiles than portfolios without them, containing only stocks and bonds. Hard assets offer inflation protection. Commodities are an important sector of the hard asset universe. The different types of commodities such as energy or industrial metals for example are characterized by a rather low correlation between to each other. The management of hard asset portfolios requires know-how and experience. Hard assets are attractive. The unprecedented global monetary and fiscal stimuli measures, coupled with the strengthening of the economy, may lead to inflation at some point. High and still rising structural deficits in the US are likely to keep the greenback under pressure as a tendency, which in turn supports commodity prices. The US dollar and commodities usually move in different directions. There are positive supply and demand catalysts which will drive the performance of hard assets. One example is the continued robust demand for commodities from the emerging economies.