4 Biggest Trends in 2014 Investing

by ETFguide | December 9, 2014 1:55 pm

Keeping track of global macroeconomic trends is a daunting task. For that reason, investors should review the latest trends each month, but with the year coming to an end, reviewing 2014 as a whole might be more helpful in preparing for the year ahead.

Here are four of this year’s biggest themes:

1) Commodities Got Crushed

All of the hyper-inflationary dreams of commodity bulls have been shot dead. As a group, commodities have fallen around 27% since 2011, and many individual sectors such as oil, as tracked by the United States Oil Fund LP (ETF) (USO[1]), are down more.  Over the past year alone, light crude oil is 31% lower.

Even defensive oriented precious metals have gotten clobbered: The ETFS Precious Metals Basket Trust (GLTR[2]), which holds gold, silver, platinum and palladium, is down almost 29% over the past four years.

2) Healthcare Sector Blazed Ahead

The booming healthcare sector has been among this year’s biggest investment themes. The S&P 500 healthcare stocks, as tracked by the Health Care SPDR (ETF) (XLV[3]), are up 30% while biotech stocks, as tracked by the iShares Nadaq Biotechnology Index (ETF) (IBB[4]), have jumped 39% since the start of the year. Both the healthcare and biotech sectors are easily outperforming the broader U.S. stock market, which has gained 16.6% over that same time frame.

• 3 Energy Stocks to Leave in 2014

3) Long-Term Bonds Outperformed Stocks

The yield on 10-year U.S. Treasuries has shocked Wall Street by sliding 20% this year. Most analysts at the beginning of the year wrongly predicted higher yields and lower bond prices.

In March, we alerted readers that long-term U.S. Treasuries, as tracked by

iShares Barclays 20+ Yr Treasury Bond (ETF) (TLT[5]), would be the best way to profit from higher bond prices and lower yields. Since the beginning of the year, TLT — which follows long-term U.S. Treasuries — has jumped by almost 23% while the SPDR S&P 500 ETF Trust (SPY[6]) is up 14%.

4) The “R” in BRIC Got Slaughtered

How bad have Russian stocks been this year? The Market Vector Russia ETF Trust (RSX[7]) has been slammed 35% and the worst may be yet to come. By comparison, the BRIC group, as tracked by the iShares MSCI BRIC Index Fund (ETF) (BKF[8]) — which Russia is part of — along with Brazil, India and China has a modest year-to-date decline of just 0.2%.

Shorting Russian stocks has been one of the best bearish trades of 2014. The Direxion Shares Exchange Traded Fund Trust (RUSS[9]) has soared around 100% year-to-date.

Crash Course in How to Build an Investment Portfolio[10]. Follow us on Twitter @ ETFguide[11].

Source URL: https://investorplace.com/2014/12/commodities-healthcare-biotech-bonds-russia/

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