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Weekly Focus - Think About It
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"It is not whether you are right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." --Stanley Druckenmiller
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Weekly Commentary
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The Market
"We don't think the world has ended." With so much doom and gloom being published these days, it's refreshing to hear a respected leader of a global, blue-chip company make a positive statement. Doug Oberhelman, the chief executive officer of Caterpillar, met with analysts last week and painted a rather bright picture of the world economy, including the quote above.
Oberhelman went on to say that Caterpillar does not expect a double-dip recession because the world's central bankers are staying on top of the situation and the global economy is improving -- especially in the developing world. As the world's largest maker of construction and mining equipment, Caterpillar is considered a good indicator of worldwide economic health, according to Associated Press.
Caterpillar, for one, thinks the world will continue recovering even if the U.S. is a bit weak. And the stunning growth of China makes that idea plausible. This being said, we still believe money can be made long-term with carefully selected U.S. equities. We continue to look both domestically and internationally for good investment opportunities. As of 8/20/10 1-week YTD 1yr 3yr 5yr 10yr S&P 500 -0.7% -3.9% 4.4% -9.5% -2.6% -3.3%
DJ Global ex US
(foreign stocks) -0.5 -5.5 5.0 -8.5 1.2 0.9
10yr Treausury
Note (Yield Only) 2.6 N/A 3.4 4.6 4.2 5.8
DJ-UBS Commodity
Index -1.0 -5.6 4.3 -6.7 -4.4 2.2
DJ Equity All REIT
TR Index -0.5 11.9 35.2 -6.0 1.3 10.1
Notes: S&P 500, DJ Global ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron's, djindexes.com. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable or not available. Blessings to you, Your VFA Team
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* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* This commentary was prepared by PEAK.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
* Past performance does not guarantee future results.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
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