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RESEARCH & ANALYSIS – WEEKLY E-NEWSLETTER
The Global Recession/Recovery Trade
May 11, 2009
Stocks and commodities are supposed to move independently of each other, because they are valued on entirely different premises. Commodities provide economic value through being consumed (Sugar in your coffee) or transformed (Crude Oil into Energy), while the value of stocks and bonds lies in the value of their future cash flows. They are truly two different animals, and investments in commodities do give exposure to a truly alternative asset class. In contrast, hedge funds are not a true alternative asset class as they often trade the very stocks and bonds you’re attempting to diversify away from.
By Jeff Malec
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