Despite confusing signals emanating from the financial press, the IRP System is giving a clear signal that the recent strength in Latin America will continue in the medium term. The Taiwan portfolio still shows a preference for REITs and Emerging Markets. Metals replaces Asia as the #5 sector.

In our US ETF model portfolio, Turkey is still on top, Brazil is in #2 position and India falls from the top five to be replaced by International Financials.

In commodities, the news is almost entirely about gold. However, the yellow metal is not trending as one might expect. According to the System, silver actually looks the stronger of the two “hard currencies”. Soft commodities are doing slightly better but our entire range of commodities is giving only very weak signals at best. Most likely, this is due to the stabilization of the US dollar. When the dollar weakens after the year end covering, expect to see stronger trends developing in the commodity area.

On currencies, the US dollar has staged its expected rally. The weakest currency in the near term looks like the Japanese Yen. Otherwise, there are not many profitable trades this week.

Top 5 Fund Sectors:

  1. Latin America
  2. REIT’s
  3. Emerging Europe
  4. Emerging Markets
  5. Metals

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