Gold vs. S&P 500 During Market Turmoil Events

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Gold is an important asset class to own in a well diversified portfolio. How much gold should one have depends on depends on many factors including an individual’s circumstances. While gold does not produce income such as dividends, it can offer a cushion to a portfolio especially when equity markets turn volatile. During market downturns when most stocks decline gold has the ability to stay strong and offer much needed stability or even a decent return.

The following chart shows the performance of gold vs. S&P 500 Total Return Index during adverse market conditions:

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Source: Gold as a Strategic Asset Class, State Street Global Advisors

Related ETFs:

  • SPDR® Gold Shares ETF (GLD)
  • SPDR S&P 500 ETF Trust (SPY)

Disclosure: No positions

The Top 10 Medical Devices Companies in the World 2021

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The Top 10 Medical Devices Companies in the World based on revenues in 2020 are shown in the chart below. The ranking is based on revenues from their medical device segments only. Similar to the pharmaceutical industry, the medical devices market is also huge. In the US for example, a simple medical bed from Stryker can cost thousands of dollars. High tech medical devices such as CT scanners from GE go for $200,000+. Overall the global medical devices market is expected to grow to US$612.7 billion by 2025.

The Top 10 Medical Device Companies in the World in 2021:

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Source: Who are the top 10 medical device companies in the world (2021)?, Proclinical

From an investment standpoint, device makers offer some of the best opportunities in the medical field since the devices are a necessity in hospitals and unlike drug companies the risk involved are less.

Referenced company tickers:

  • Medtronic PLC (MDT)
  • Johnson & Johnson (JNJ)
  • Abbott Laboratories(ABT)
  • Koninklijke Philips NV (PHG)
  • Fresenius Medical Care AG & Co (FMS)
  • General Electric Company (GE)
  •  Becton, Dickinson and Company (BDX)
  • Siemens Healthineers (SMMNY)
  • Cardinal Health Inc (CAH)
  • Stryker Corporation (SYK)

Disclosure: No positions

The Euro in the World: Infographic

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The Euro is the second most important and powerful currency in the world. I had bookmarked the below infographic on the Euro many months ago. The Euro has made life simpler and European economies much efficient. With the introduction of Euro many years ago, no longer one had to worry about converting to various currencies like the French Franc, Deutsche Mark, etc.

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Source: The Council of the EU and the European Council

On The Power of Dividends and Compounding Using S&P 500 Returns

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Dividends play a critical role in the long-term returns of equities. Stocks that pay dividends are ideal investment vehicles for building wealth over many years or decades. Generally dividend payers tend to raise dividends occasionally if not consistently each year. So dividend yields of even 2% as a starting point can lead to substantial growth in the long run due to the power of compounding. The magic of compounding comes from the additional shares purchased in small increments each quarter. In bear markets dividends may offer the only return on an equity investment. It is possible to earn a decent dividend income with a well diversified portfolio even when the market goes south.

The power of dividends and compounding is vividly illustrated below using the S&P 500 index returns from 1960 to 2021. A $10K investment would have grown to over $4.9 million with the S&P 500 Total Return which includes dividend reinvested compared to just under $800K with the S&P 500 Price Index during the period noted above. The wide gap in returns is indeed astonishing.

 

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Source: The Power of Dividends: Past, Present, and Future, Hartford Funds

So the key takeaway is that investors should not ignore dividends. According to the above research report from Hartford Funds, 84% of the total return of the S&P 500 from 1960 to 2021 came from reinvested dividends.

Related ETFs:

  • SPDR S&P 500 ETF Trust (SPY)
  • iShares Select Dividend ETF (DVY)

Disclosure: No positions

Who Imports The Most Russian Oil: Infographic

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Russia is one of the world’s major oil producers and exporters. Much of Europe including the economic engine Germany depend on Russian oil. Among the emerging markets China is a major consumer of Russian oil. The following infographic shows additional insights on the dependency of other countries for crude oil from Russia:

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Source: Information is Beautiful