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    AssetClasses 2013

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    Ankur Sharda
    Asset classes in 2013 will be strongly influenced by movements in the US dollar. In 2012, most asset classes performed within +/- 5% on an annual basis and were impacted by mid-year volatility. Commodities are correlated to money supply increases by nations engaging in quantitative easing. The US dollar faces long-term weakness but may stabilize around 61-63 before declining further. Problems in the Eurozone may be subsiding but money printing continues, fueling inflation. Investors will likely shift money into commodities, precious metals, and emerging markets. Gold has found support after correcting and may reach $2450 by the end of 2013 as it enters its final bull phase.

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    AssetClasses 2013

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    Ankur Sharda
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    Asset classes in 2013 will be strongly influenced by movements in the US dollar. In 2012, most asset classes performed within +/- 5% on an annual basis and were impacted by mid-year volatility. Commodities are correlated to money supply increases by nations engaging in quantitative easing. The US dollar faces long-term weakness but may stabilize around 61-63 before declining further. Problems in the Eurozone may be subsiding but money printing continues, fueling inflation. Investors will likely shift money into commodities, precious metals, and emerging markets. Gold has found support after correcting and may reach $2450 by the end of 2013 as it enters its final bull phase.

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    Asset classes in 2013 will be strongly influenced by movements in the US dollar. In 2012, most asset classes performed within +/- 5% on an annual basis and were impacted by mid-year volatility. Commodities are correlated to money supply increases by nations engaging in quantitative easing. The US dollar faces long-term weakness but may stabilize around 61-63 before declining further. Problems in the Eurozone may be subsiding but money printing continues, fueling inflation. Investors will likely shift money into commodities, precious metals, and emerging markets. Gold has found support after correcting and may reach $2450 by the end of 2013 as it enters its final bull phase.

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    44 views4 pages

    AssetClasses 2013

    Uploaded by

    Ankur Sharda
    Asset classes in 2013 will be strongly influenced by movements in the US dollar. In 2012, most asset classes performed within +/- 5% on an annual basis and were impacted by mid-year volatility. Commodities are correlated to money supply increases by nations engaging in quantitative easing. The US dollar faces long-term weakness but may stabilize around 61-63 before declining further. Problems in the Eurozone may be subsiding but money printing continues, fueling inflation. Investors will likely shift money into commodities, precious metals, and emerging markets. Gold has found support after correcting and may reach $2450 by the end of 2013 as it enters its final bull phase.

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    ASSET CLASSES IN 2013

    As stated earlier and in continuation to my article; Asset classes in 2012, I would restate that asset classes like precious metals, base metals, agricultural commodities, stock market, real estate and others; the performance of each asset classes will be directly linked to the movement of US dollar (USD) currency. USD Index reached 81 levels during first week of January12 and also remained at same level during the month of December12 where every other asset classes performed status quo simultaneously. Along with mid-year volatility, mostly asset classes like gold, silver, copper, crude oil, emerging stock markets, currencies and sugar; remained in the range of +/- 5% on annual basis. Stock Markets in USA remained well and Real Estate remained subdued whereas few European stock markets took a hard beating with recovery by the year end of 2012. Hard and soft commodities are strongly correlated to money supply where money printing is adopted by most of the nations in the world which promise a strong price gain in the year 2013. USD Index is still under pressure from long term point of view but recently it topped from 84 (end of July12) to 80. USD Index should come to the level of 61-63 before it could stabilize and at the same time Gold should be at historic high. Euro zone crisis is just another financial turmoil where 4 countries have to take strong austerity plan for implementation or else there could be break up of Euro nations. Eventually uncertainty about future of Euro currency is subsided leading to strengthening of Euro, hence USD Index has corrected. Euro Nations problem is not different from US problem where every nation resort to money printing. One way or the other, US government and other developed nations are increasing money supply by the means of quantitative easing and money printing which leads to inflation across the world. With no choice left for the investors and the money managers, they shall shift to invest in assets like commodities and emerging stock markets. Since last 6 months USD Index performed well due to indecisiveness on investments. Eventually, increase of money supply by US government and inherit weakness of US economy cannot be neglected, hence the tide would once again turn towards weakness of USD index and higher prices of other assets classes like stock markets, commodities and precious metals. USD index face a strong technical support at 80 levels thereafter at 73 levels. It is very unlikely that USD index can cross 89 levels before settling at 65 levels where it could face a long haul. Recently, US Congress passed a revised tax system which shall postpone US fiscal cliff by raking in US$ 625 billion where US Debt stands at US$ 16 trillion approximately. Problem still persists and it is not yet addressed that how the government will reduce the huge debt, so turmoil in near future is obvious, hence rally in precious metals and commodities. The sideways performance in emerging stock markets since more than one year, gave a foundation of bottoming out. From middle of the year 2011 to end of 2012, the performance of most of the stock markets remained sideways with volatility as well as for precious metals. After the long consolidation of 12 to 18 months, majority of stock markets remained sideways with upward bias since August12. The year 2012 was thoroughly sideways for Gold, Silver, Sugar, Equities, Currencies and Crude Oil barring intra year volatility. Gold looks like completing its fourth wave down since last 11 years

    when the rally started from 280 and fourth wave is correction of rally from 740 to 1940 where considering one third correction would result into the price of US$ 1540 as strong long term support which proved to be right up till now. Gold fluctuated between from US$1540 to US$1770 where it found support at US$ 1520 (30th December11) and rebound strongly. It is in final bull phase where fifth wave up is developing which would be very strong and powerful. In 2013, Gold shall consolidate upto 1st quarter then building of bubble shall begin where the results can be seen in 2013 and 2014. Technically, the year-end target of gold is US$2450 and could surprise on the higher side as it is entering the final bull phase as well as 5th Wave of technical long term rally. Parallel to gold, there are other precious metals which shall outshine as well as build up of positions in crude oil, copper, rice, sugar, natural gas, zinc etc. Base metals shall move upward gradually in comparison to precious metals so would be emerging stock markets. US treasury bonds have gone to historical low levels where bubble can burst at the time when there shall be no confidence on USD as well as increase of interest rates from mid 2014 as indicted by Ben Bernanke. Interest rates in US are kept artificially low as well as increase in money supply which shall help inflation go up by the means of higher commodity prices. US government would be left with no choice but to increase interest rates for curbing of hyper inflation. The financial year 2013, shall be flushed with money and limited opportunities to invest, which would result into inflating commodity prices, eventually leading to hyper inflation in most of the economies of the world. Hyper inflation shall bring unrest in many countries where current rulers shall be toppled down either by force or voting out in democracy. Evidence is from Egypt, Syria and Greece that citizens are agitating. Situation will be vulnerable where adverse news shall keep on flowing during the year as well as bull-run in commodities. Such result is only due to failure of US economy and devaluation of US Dollar. Coming 2 years would bring more political crisis, geo-political problems would arise, change to high interest rates, collapse of US treasury bonds, nation debt crisis, may be war and any other new crisis in a form which shall emerge as the time shall pass. In scenario like this once again safe haven would be Gold, other physical hard assets and emerging stock markets.

    Technically speaking: Dow Jones Industrial Average (DJIA) Current Level 13100 (as on 31-12-2012) DJIA broke all the major resistances and it touched a high of 13600 thereafter it is hovering around 13000 levels. Our earlier stand remains the same that it could fall upto 10200. It is passing the stage of intermediate wave of long bear market. There shall be volatility with downward bias. Commodities based equities shall outperform the other sectors of the market. The last article on Asset Classes in 2012 proved to be correct on DJIA where it touched the high of 13600. Avoid is recommended for investment and speculative range with full year volatility between levels of 10200 to 13600 where there could be upward false move which could be an all time high.

    Straits Times Index (STI) Current Level 3167 (as on 31-12-2012) STI remained in the range of 2750 and 3100 during the year 2012 where it corrected consolidating sideways. The last article on Asset Classes in 2012 proved to be correct on STI. Buy was recommended with a gain of 15% from 2750 level. STI completed its correction and shall move upwards cautiously and target at 3850 which is all time high. Buy is recommended.

    Hang Sang Index (HSI) Current Level 22650 (as on 31-12-2012) HSI remained in the range of 18000 to 21000 during the year 2012 where it corrected consolidating sideways. The last article on Asset Classes in 2012 proved to be correct on HSI as buy was recommended at 19100 levels with 20% gain which proved to be correct in 2012 as it touched 22650 levels. Buy is recommended at current level for target of 30000 which is all time high.

    BSE Sensex (BSE) Current Level 19426 (as on 31-12-2012) BSE remained in the range of 16000 to 19500 during the year 2012 where it corrected consolidating sideways. Buy was recommended at 16000 levels in the last article on Asset Classes in 2012 with target of 20000 which proved to be correct. Buy is recommended at current level for target of 25000 which shall surpass the all time high of 21000.

    By Ankur Sharda
    http://www.scribd.com/doc/6014281/A-Guide-For-Discerning-Investor

    www.myspace.com/ankursharda

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