Monday, August 21, 2006
Timber’s Consistent Performance
Timber has been one of the best performing alternative investments to equities
over the past several decades. Timber has also been more consistent than
stocks. Over the past 45 years, timber has experienced only three down years,
vs. 12 for stocks, according to Yaser Anwar at SeekingAlpha.com. From 1972
through mid-2006, timber returns averaged around 14.5%, vs. 11.1% for the
S&P 500. According to an article by David Berman featured at MoneySense.ca,
one of the great advantages that timber growers have is that when market
prices are unattractive they simply harvest less trees. As trees grow,
their worth increases.
Tuesday, August 22, 2006
Total Net Assets of Variable Annuities
The total net assets held in U.S. variable annuities grew from $1.205 trillion
at the end of 2005 to $1.260 trillion at the close of Q1’06, or an increase
of 4.5%, according to the National Association for Variable Annuities. Net
assets were up 14.2% from Q1’05. The following figures indicate that net
inflows to variable annuities have grown steadily over the past three quarters:
$7.04 billion (Q1’06); $5.82 billion (Q4’05); and $4.61 billion (Q3’05).
Wednesday, August 23, 2006
Foreign Investments in U.S. Securities
Net foreign purchases of U.S. securities totaled $75.1 billion in June, slightly
above the average for the past year, but up 18% from May’s $63.6 billion,
according to the Treasury Department. The inflows of foreign capital to our
securities markets outpaced our $64.8 billion trade deficit. Foreign ownership
of Treasury bills, notes and bonds stood at $2.09 trillion in June. Japan and
China own $635.3 billion and $327.7 billion, respectively.
Thursday, August 24, 2006
2006 M&A Activity
The combination of a strong global economy and global savings glut has
boosted M&A activity in 2006, according to MSN.com. Global GDP
growth has averaged nearly 4.0% over the past five years and debt
securities worldwide total nearly $14 trillion. Year-to-date, global
mergers are running 38.9% ahead of last year’s pace, which finished
the year at $2.75 trillion, according to Thomson Financial. M&A
deal volume totaled just $1.2 trillion in 2002.
Friday, August 25, 2006
Utility Stocks
Electric utilities have historically been a sector investors can turn to in troubled
times because their earnings are dependable since the need for electricity
never goes away and the rates utilities charge are regulated. Valuation,
however, matters even when it comes to utilities. The average P-E of utility,
stocks normally runs about 70% of the P-E of the S&P 500. Currently, on a
trailing 12-month earnings basis, the average P-E of utility stocks is 14.6, vs.
15.6 for the S&P 500, according to USA TODAY. Utilities are now trading at
94% of the P-E of the S&P 500.
Filed under: Factoids
