Equities
The last quarter in 2014 is expected to be more volatile than the first three quarters, markets have already shown signs of being nervous.
The US and many other markets are looking slightly vulnerable at a time when plenty of other problems are mounting, which include a downturn in china to stagnation in Europe and the likelihood of increasing interest rates are also on investor’s radar too. The end of cheap money could well cause turbulence in the markets in view of the record debt levels.
In light of this it could well be worth looking at markets which are attractively valued and would also benefit from likely quantitative easing.
Property
As an asset class for investment, the US looks better value than the UK. This is largely because the US has remained largely flat in the last 12 months and looks fair value at the moment, which cannot be said for the UK market.
Bonds
Government bonds are looking extremely expensive at present and the risk of a fall looks greater than the scope for further gains.
Commodities
The US dollar’s rally is taking its toll and hurting commodity prices across the board. The possibility of higher US interest rates would also make commodities look unfavourable as they do not pay any interest.
The supply/demand factor doesn’t look good either at present as China’s growth has eased.
Precious Metals
Gold has fallen to an eight month low, this has largely been driven by the solid US data, as Gold thrives on poor data and sentiment. Raising interest rates from historically low levels could cause turbulence, which may make investors look at Gold again as a safe haven.
Energy
As a result of the current oversupply, oil has fallen in price by over 12% between July and September. US natural gas looks promising over the long term as tougher environmental regulations will false households and industries to switch to the cleanest burning fossil fuel.