Investing in different economic cycles and how that dramatically impacts portfolio management.

A lot of books have been printed on the principle of portfolio risk management.

Even television personalities ask the question, “Are you diversified?” and play games telling callers if their stock picks are appropriately spread across different industrial sectors.

The the S&P500 will have adequate performance during inflationary cycles, but Gold is typically the better performer between the two.

Summerland Alerts track the NYSE Arca Gold Miners Index (GDM), the preeminent index covering the gold mining industry.

This ETF best represents the universe of gold mining companies while maintaining the ease of investment currently offered by the index. It is highly optimized to avoid turnover.

It has been expanded to include non-U.S. listed companies and it excludes companies with less than $750 million in market capitalization from being considered for inclusion.

These limits allow  the index to maintain or increase exposure to the gold mining industry while reducing exposure to those companies with lower levels of liquidity.

During periods of stable growth where inflation is under control, stocks such as those in the S&P500 will outperform gold and treasuries.

Summerland Alerts track The S&P 500, a stock market index based on the market capitalizations of 500 large, successful companies having common stock listed on the NYSE or NASDAQ.

The S&P 500 differs from other indices such as the Dow Jones Industrial Average and the Nasdaq Composite due to its diverse constituency and weighting methodology.

The S&P 500 is one of the largest equity indices and many consider it the best representation of the U.S. stock market as well as a bellwether for the U.S. economy.  In fact, The National Bureau of Economic Research has said common stocks are a leading indicator of economic cycles.

Likewise, although the S&P 500 is highly diversified, it won’t perform nearly as well as Treasuries in difficult times as money flows toward what are considered “safe” and “stable” investments.

Summerland Alerts track the NYSE 20 Year Plus Treasury Bond Index which is a multiple-security fixed income index that aims to track the total returns of the long-term 20 year and greater maturity range of the U.S. Treasury bond market.

Bond prices rise with demand which increase during times of financial crisis and stock market volatility as more investors  move their assets into perceived “safe” investments.

Investors should diversify their portfolios in a way that’s designed to ensure the portfolio is protected regardless of underlying economic trends.

Proper diversification keeps these economic conditions in mind so that one can leverage the bull and bear cycles in each economic cycle to produce exaggerated returns in a more consistent manner.

For Inflation, Summerland Associates Alerts track the Gold Miners index. Gold performs particularly well during periods of inflation and the NYSE Arca Gold Miners Index offers an opportunity to invest in the “potential” of Gold when it is appreciating at its greatest pace.

For Growth, Summerland Associates Alerts track the S&P500. It represents truly the most successful companies and gives instant access to broad portfolio diversification without the need to manage multiple stocks. It offers an opportunity to leverage “growth” cycles in a simple and convenient manner.

Finally for Recessionary trends, Summerland Associates Alerts tracks 20-year Treasuries. Treasuries are considered a relatively “safe” investment and generate generally better performance than cash during difficult economic cycles.