Let’s look at what this analysis tells us in October.
The following chart shows the value and momentum scores for the ten broad asset classes we consider. The upper right area is the ideal spot for an investment, indicating both attractive value and positive momentum. You can see that value and momentum are usually opposites, with most investments attractive in terms of one, but not both.
Source: Mariposa Capital Management, LLC
As of 10/16/2014, the two most attractive asset classes using value and momentum are:
- Emerging Market Stocks
- US Treasury Bonds
The most unattractive asset classes are:
- Foreign Real Estate
For this analysis, we are using the following funds as proxies for each asset class.
|US Stocks||Vanguard Total Stock Market||VTI|
|Foreign Stocks||Vanguard FTSE Developed Markets||VEA|
|EM Stocks||Vanguard FTSE Emerging Markets||VWO|
|US Real Estate||Vanguard REIT||VNQ|
|Foreign Real Estate||Vanguard Global ex-US Real Estate||VNQI|
|Commodities||PowerShares DB Commodity||DBC|
|Commodity Stocks||SPDR S&P Global Natural Resources||GNR|
|US Treasuries||iShares 7-10 Year Treasury Bond||IEF|
|US TIPS||iShares TIPS Bond||TIP|
|Cash||iShares Short Treasury Bond||SHV|