1 Month Best Returns ending 30 June 2008
Czech Republic +2.6%
South Korea -11.3%
If we look at the 1 month return ended June, its obvious the ones really struggling with inflationary expectations and a high interest rate level already are getting whacked greater. The reverse was also largely true of course.
3 Month Returns Ended 30 June 2008
South Korea -6.2%
On a 3 month basis, the excitement was with resource rich nations judging from the top 5 performers. The selling has still been largely in those countries struggling with high real interest rates and even higher inflationary expectations. That being the case, with a downtrending commodity prices, would the performers going forward change?
A serious downtrend in commodity prices will spur equities globally. However, those struggling with a high BLR e.g. 7% or higher will find its equity markets harder to perform as returns will be judged against returns from equity. That being the case, good dividend yield markets with a correspondingly low BLR and a largely containable inflation rate of 5% or below, and a strong currency outlook will be favoured: