Return on Investments Expectations

UBS reported that the median expected 12-month return on investments fell in August to 6.0% from 7.0% in July. The mean (average) expected return fell to 8.6% from 11.1%. The mean expected return was close to 19% at the peak near the end of 1999 and was as high as 14% in early 2006. The next few months will likely see it drop further but it serves as an early contrarian signal that the it may make sense to go back in to equities for the seasonally strong November to April period.

Strategy Update: We went from 0% to 20% commodity funds in the Dynamic Commodity Strategy; it is still a bit early to play commodities in big way again, what with the global economy slowing down, but with the recent selloff in crude, natural gas and other commodities it made sense to start looking again. The Strategy continues to outperform general commodity mutual funds YTD. Bloomberg News reports that the average commodity hedge fund posted a loss of 11.8% in July. Our Dynamic Commodity Strategy was up 2.42% over the same period.