The markets are very volatile with the pending European Central Bank decisions on quantitative easing against the backdrop of the unlinking of the Swiss Franc form the Euro and those major disruptions. Fortunately the RealReturnEnvironment (RRE) portfolio is not exposed to Europe and while it has fallen during the past week, the declines have been relatively modest as the RRE portfolio has only given up the previous week's 1% gains since December 31.The portfolio position so far in 2015 is now relatively unchanged. See below.
The RealReturnEnvironment (RRE) portfolio declined in the last week of 2014 so that the gain over the year to December 31, 2014 was 28%. This portfolio value will be utilized as the basis for the RRE gains and losses in 2015 (see below).
The RealReturnEnvironment (RRE) portfolio is now 12 months old with a return of just north of 30% (see below). All major US markets have hit new highs this week as the third quarter Gross Domestic Product (GDP) was revised upwards to 5%, indicating that the US recovery is well entrenched. The economic outlook for 2015 is strong given the decline in oil prices as reflected in Continental Resources Inc (CRI) held in the RRE portfolio that is now down 29.33%. This CRI stock was bought for the RRE as a natural gas play but oil from shale was also a big factor in its earnings and its share market pricing. Besides CRI, the loses in the RRE portfolio are highlighted by Pacific Basin Shipping Ltd. down 44% which simply reflects a mistaken bet on shipping efficiencies from Asia to Europe and North America -- A RRE stock selection boo-boo! The RRE portfolio will be rebased to end 2014 to fully conform to the calendar.
Real Return Environment is intended to serve the needs of students, researchers and investors by providing topical articles, country data, literature references and investment insights on topics such as primary energy use.
"Real Return Environment is intended to serve the needs of students, researchers and investors by providing topical articles, country data, literature references and investment insights on topics such as primary energy use."