By Martin Hutchinson Contributing Editor U.S. Federal Reserve Chairman Ben S. Bernanke ignored the warnings of most economists last week, and kept the benchmark Federal Funds rate at 2%, far below the actual rate of inflation. As a result of this non-move, investors can probably look forward to having global commodities boom to continue for at least a while longer. Here’s why. Genesis of a Commodities Boom Although the overall commodities boom has been under way for a number of years, prices didn’t just move up in a straight line: There have been long stretches during which prices advanced sharply, followed by short stretches of volatile prices reversals. The latest advance - and certainly one of the most intense - was ignited Sept. 18, which is when the U.S. central bank embarked upon one of the most aggressive rate-cutting campaigns in its history, slashing short-term rates from ...

By Jason Simpkins Associate Editor The benchmark crude oil rose 57 cents to settle at a record-high $140.21 a barrel on the New York Mercantile Exchange Friday, after a sell-off on Wall Street left the Dow Jones Industrial Average in bear territory. After plummeting 358 points on Thursday, the Dow dropped another 107 points to end the week at 11,346.51. After sliding 4.2% last week, the Dow is now down 20% from its Oct. 9 high of 14,165. And that means the benchmark U.S. index has officially entered into a bear market. “With oil prices bursting through the $140 threshold and seemingly unstoppable, economists are busily debating whether it’s all going to end in fire (inflation) or ice (deep recession),” said Doug Porter, senior economist at BMO Capital Markets. “Equity markets aren’t so concerned about the fineries of the debate, but are ...

I have been interested in and invested in Vietnam since the fall of 2006. I bought the Vietnam Opportunity Fund (VOF.L) at $2.48, sold half of it at $4.73 a few months later and still have some shares now trading at $1.99.The fund hovered along at down a little for the year before starting to swoon about a month ago, consistent with the VN Index which is down 59% YTD.The GDP has been en fuego, but less than in China, which has proven too hot to handle as now inflation appears to be running at 25-30%.As I wrote several times along the way about Vietnam, a destination like this is going to have huge booms and huge busts along the way.The story on the ground, which of course includes the inflation ...

Date Start: 1Jan2008
NAV = $4,461.93 as of date 02Jun2008
Returns to-date (since 1Jan2008) = -10.76%

Benchmark: iShares MSCI EAFE Index Fund (ETF)
Date Start: 1Jan2008
NAV = $4,803.48 as of date 30May2008
Returns to-date (since 1Jan2008) = -1.93%

Date Start: 1Jan2008
NAV = $4,610.50 as of date 19May2008
Returns to-date (since 1Jan2008) = -7.79%

New: Decided to pick a benchmark that can better reflect BFS.

Benchmark: iShares MSCI EAFE Index Fund (ETF)
Date Start: 1Jan2008
NAV = $4,919.18 as of date 16May2008
Returns to-date (since 1Jan2008) = 0.38%

click to enlarge view

Let's see quick comparison between emerging markets and developed economies. I used ETF as a tool. IShares MSCI EAFA (EFA) as a benchmark for international stocks from developed economies. And IShares MSCI E.M.I.F. (EEM) for emerging markets. You can see there is only slight difference in P/E valuation.P/E ratio:EFA 11,5EEM 12,8Someone can say EEM is not real ETF to measure emerging market performance. That's partially true. More than half (53%) holdings are listed on US markets as ADR. In addition to that big share is from already developed countries like South Korea, Taiwan.The important thing is to compare EPS growth. From attached chart you can see that estimated earnings growth for 2008 is by 4,6 % faster than for EFA. Moreover both ETF are traded currently with premium against ...