Mixed Signals on Commodities - By: S.C.R. Analysts

Finance Portfolio Research & Analysis for August 11 – 15, 2008

From our International (excludes the USA) research division and subsequently International strategy analysts, the following financial analysis excerpts are from revisions recently completed on Internationally based investment portfolios:

SCR Step 1 – Analysis: From No. D6 (Int’l) Financial Portfolio Research Revision –
[iShares (Wgt: MC)] Commodity Index (GSC) vs. [iShares (Wgt: MC)] S&P Global 100 with U.S. (IOO):
(1) Observation – Relative Strength: Results in the relative strength analysis of Commodity Index (GSC) versus S&P Global 100 with U.S. (IOO) indicate that GSC is underperforming IOO on a relative basis.
(2) Observation – Regression: Comparison of the linear regression to the time-series that has a 3-period forward shift finds the following formation: The price is between the linear regression and the time-series, and the linear regression is still below the time-series. Since the linear regression provides the “best fit” to the price path, this has near term neutral implications for GSC. However, a change in price path direction could be in the making.
(3) Observation – Price Performance: Commodity Index (GSC) shows a continuation (that began early July) of a negative price path (downward slope) on fairly strong indicators.
[Reference Charts: D6-28 (relative strength); AD6A-10a (regression); AD6B-10b (price)]

Additional considerations:
First, for most investors, a diversified investment portfolio approach combining stocks, bonds, money market securities, etc., is optimal. While financial diversification cannot protect against a loss from a declining market, it can reduce the overall portfolio’s volatility.

Second, with the globalization of information technologies, college education becomes a prerequisite to most careers. Thus, a goal of successful investing in a variety of assets becomes crucial in providing the upper level education necessary for your child’s future. In consideration of that goal, studying the information available on this site, which has been kind enough to host our research in this article, will help. At www.StrategicCapitalResearch.com, we provide additional finance educational materials to what you find here in both investment books and videos. Between the two sites, you should be able to find enough information to get started toward achieving your education investment goals.

Third, to the above analysis excerpt, the usual disclaimers apply. Since all Strategic Capital Research publications provide research that is conducted using historical data, a reminder needs to be made that the analysis of past market reactions cannot predict future market actions. In particular, no amount of historical data can predict the sudden changes that occasionally occur in financial markets.

About the Author

The SCR Analysts represent the collective voice of the researchers at Strategic Capital Research (SCR). We provide global financial analyses, and subsequent strategies, from countries to companies. Copyright 2007-2008.
[SCR] Research & Analysis with Free Excerpts at Strategic Capital Research, LLC.

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