A few weeks ago we started discussing the fall in commodity prices, including oil and precious metals and the drivers for those moves. Since then we are continuing the downtrend in prices in an orderly sell off. There have been a number of key drivers for the move down, including a stronger dollar, a slow down in emerging markets primarily Chinese industrial demand, expectations of a forthcoming interest rate hike, global deflationary pressures and a rising US bond market.
UBS has recently put out two commodity reports that may be of interest and I have included a link to them below.
The first report focuses on the fundamentals of Platinum and the link to Gold. The second is a more holistic review of all commodities.
You can download the reports through the following link.
UBS just released reports with their outlook for Gold and Palladium. They expect further downsides over the next three months, in large part due to weakening economy in China as well as likelihood of Fed Rate Hikes. Initial targets are $1,100 for Gold and $600 for Palladium per oz.
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A number of years ago there was an initial movement towards Socially Responsible Investing. During the run up prior to 2008, and in the years after, some of the best performers were investments that some people would not ordinarily may not want to support, such as alcohol, tobacco, firearms or gambling companies. In light of this, you had sponsors putting together offerings that focused on companies that fit the SRI mold. Furthermore, yo had a number of funds that aimed to comply with various religious tenants in a number of faith based funds. Unfortunately, many of these funds underperformed versus their unconstrained peers.
Over the last few years, in in the last 2 in particular, we had a new take on this theme with the introduction of “Sustainability Investing.” While there is no one single definition, most of the sponsors who offer products in this space define it around 3 pillars, environmental, social and corporate governance and responsibility.
Touchstone Investments describes it as follows:
…evaluation of a company’s sustainability practices which considers and analyzes the potential environmental, social and governance impacts and risks of a company, how well the company manages these impacts and risks, and ascertains the company’s willingness and ability to take a leadership position in implementing best practices.
Based on the above criteria, sustainability themed investments will tend to be your larger, well capitalized firms.
From the few funds that we do have, on the whole, you can expect to get market performance with about the same volatility. Generally the funds we have looked at are better performers than purely SRI driven investments, and should be an option to look into if SRI is a part of your investment policy.
Two economic indicators were released today, personal incomes and personal spending. We learned that consumer incomes were up slightly, however consumers were not spending that extra money, even with lower energy prices. Unfortunately, while putting away more money is great news for individuals, it is bad news for the economy, considering that the large portion of our GDP is based on consumer spending.
Since Maks Financial Services’ responsibility is to you individually , and not the economy as a whole, here are 3.5 more ways of saving money, without actually cutting things back.