Finance Portfolio Research & Analysis for Sept. 22-26, 2008
From our Global (includes the USA) research division and subsequently Global strategy analysts, the following financial analysis excerpts are from revisions recently completed on Globally based investment portfolios:
SCR Step 1-Analysis: From No. D8 (Global) Financial Portfolio Research Revision –
iShares G. Sachs Natural Resources (IGE) vs. SPDR Consumer Staples (XLP):
(1) Observation – Relative Strength: Results in the relative strength analysis of iShares G. Sachs Nat. Resources (IGE) versus SPDR Consumer Staples (XLP) indicate that the IGE has shifted back from outperforming XLP on a relative basis to one that is more neutral / negative. We noted on last month’s revision that the outperformance was on weak indicators. This relative strength ratio is important because it is often used as a proxy for inflation.
(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 above the linear regression and the linear regression is above the time-series. Since the linear regression provides the “best fit” to the price path, this has positive implications for IGE.
(3) Observation – Price Performance: iShares G. Sachs Nat. Resources (IGE) shows a shift back from a slightly positive (upward slope) to one that is more neutral / negative on mixed indicators.
[Reference Charts - SCR: D8-9 (relative strength); A8-9A (regression); A8-9B (price)]
SCR Step 2-Implication & Strategy: From No. SID8 (Global) Strategy Revision
(1) Possible Implication: The summary of the stated observations for IGE is Neutral, and has near term Neutral implications. Even though we see
Additional Observation:
A bullish “Breadth Thrust” occurred late last week! We say THANKS to our research revision list subscribers with private and exclusive investment research with subsequent strategies.
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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 volatility of the overall portfolio.
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 the future of your children. 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. Finally, the reference chart numbers refer to both the portfolios and their completed auxiliary analyses that are located at www.strategiccapitalresearch.com/research.html.
