The data has been compiled (finally!) and it is time to see how the various asset classes stack up performance wise so far in 2011. With stocks on a tear, it does not surprise us to see that US Real Estate, US Stocks, and World Stocks at the top of the list. For real estate, please note that we use an ETF that tracks the stock market value of several publicly traded REITS as a proxy for performance, and that the stock prices can appreciate faster than the real estate underlying them.

 

 

 

 

 

 

 

We don’t have much to add regarding stock market performance other than that QE2 obviously continues to be a very good thing for the stock market as companies continue to benefit from ultra-low interest rates. However, despite the fact the stock market rally is showing zero signs of dissipating anytime soon, we would be amiss not too advise investors that they should look to diversify their holdings NOW, not after stocks crash again. In other words, just like there is no point to buying insurance after you’re in a car accident; diversification only benefits those who have the foresight to see dark clouds on the horizon.

Elsewhere, commodity prices continue to climb (see charts from our favorite site Finviz.com) amid inflationary pressures in grains and cotton. Cotton in particular has seen a rally of historic proportions with futures climbing over 250% in the past year. And, of course, it is good to see managed futures (as measured by the Newedge CTA Index) start the year off on the right foot as well at +0.89%. Trendfollowers and spread traders continue to find the bullish market conditions to their liking, while short-term programs are finally starting to show some signs of life as well.