The Linkous Group, Ltd.
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LABOR DAY, MEXICO & GOLD
“Susan On Money”
September 8, 2011
Happy Labor Day to all of you. Sophia and I are enjoying some time in Mexico with friends so this week’s article comes to you from Anthony Valeri, CFA.
Equity & Commodities Asset Classes
We downgraded Precious Metals to neutral/positive from positive following a surge in gold prices. While we believe precious metals can continue to play a role in portfolios, given policy makers attempt to reflate developed country economies and our view that the U.S. dollar may remain under downward pressure, the recent price of gold surged from just over $1500 per ounce to $1900 before finishing the month just above $1800. Such acceleration may be unsustainable and subject to short-term correction in our view. Furthermore, the near-term benefits of precious metals are reduced with stocks and bond markets mostly pricing in a recession. Additional near-term price appreciation may be limited.
We added a positive bias on the Consumer Discretionary stock sector. Consumer spending has remained remarkably resilient through recent market turmoil and is also reflected in the resilience of Consumer Discretionary stocks as well.
Anthony Valeri, CFA
Notes: The opinions voiced in this material are for general information only. Stock investing may involve risk including loss of principal. Consumer Discretionary Sector: Companies that tend to be the most sensitive to economic cycles. Its manufacturing segment includes automotive, household durable goods, textiles and apparel, and leisure equipment. The service segment includes hotels and restaurants.
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In This Issue
Quote of the Week
“Knowledge is the only instrument of production that is not subject to the law of diminishing returns.”
~John Maurice Clark