The Top Peformers of 2010 (What Can We Learn?)

The Top Performers of 2010 (What Can We Learn?)

I know you want to [continue] to grow and protect your money in 2011, right?

Of course you do, that is why you read communications like this.

So let’s start with Newton’s first law of motion, which is often stated as:

An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.

It is much easier for an investor to grow and protect their money by placing it in assets that are already going up. Isaac Newton figured this out 330 years ago.

Investors often do just the opposite. Investors buy stocks with the hope that they will go up (an object at rest stays at rest).

So, let us revisit 2010 to recognize and notice what investments in motion were best for our portfolios.

In order of strength:

1)      Technology – (saving companies money)

  1. Internet B2B (BHH)
  2. Internet Infrastructure (IIH)
  3. Networking  (PXQ)

2)      Commodities – (money printing is showing up here)

  1. Soft commodities (JJS)
  2. Agricultural commodities (JJA)
  3. Precious Metals (CEF)

3)      Emerging Markets (sound fiscal and monetary driven countries)

  1. Emerging Markets (EET)


What do you notice?

Out of the tens of thousands of stocks, sectors, ETFs, mutual funds, closed-end funds and bonds the top performers of 2010 all came from three sectors.

Emerging Markets

Technology is at the top of the list because it helps companies cut expenses and be more profitable.

Commodities made the list because of the world’s central banks printing trillions of dollars/Yen/Euros/etc.

And finally we have Emerging Markets, which perhaps is a misnomer. Is Singapore, Taiwan, Hong Kong and China really emerging. I think they have emerged. Will there be rough spots…of course, but emerging…not anymore.  

What we are witnessing is the passing of the baton from a Western-Centric-Century to a “non-Western-Centric-Century. The 21st Century is the century of Asia and South America.

So what do I think Investors should do with their money in 2011?

I think investors should look at what sectors and stocks are in motion. So what’s in motion?

There is upward motion in technology.

There is upward motion in physical assets.

And there is upward motion into countries that have young work forces, low or zero debt and stable monetary policies.

And I will add one more, “biotech” (more on this in a follow up communication).

My theme of 2011, all the investments in motion will stay in motion.

Together, we are growing and protecting your money,

RC Peck, CFP

PS – An object at rest stays at rest and an object in motion stays in motion.

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