The revival in asset prices last month looks impressive, marking a contrast with the red ink of August. On a year-to-date basis, however, the results are mixed, with an even split between losses and gains for the major asset classes (excluding cash, which continues to tread water in the land of zero returns). Nonetheless, GMI’s 8.9% rise so far in 2013 through September’s close is a strong advance for a broadly diversified mix of everything. For the moment, at least, Mr. Market’s asset allocation is still a tough act to beat.
The one month figure is good to monitor but what is more significant is the YTD figures which gives a better grasp of the prevailing trends. Look at the top gainers on a YTD basis, they were US stocks and Foreign developed equities ... a significant trend to stay in developed markets. This may already be a deep trend this year to stay away from emerging markets, which may further lend clarity to the sell down in BRICs over the last few months. In generalised tones, the trend is not reversing yet, which would means that the dangers and risks attached to being invested in emerging markets and their currencies are still "high".
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