3Q Scorecard

With just 3 months until the end of the year, it’s interesting to see the performance scorecard of different asset classes as of the end of September. The best performing asset this year in the list, has been Gold, and Silver (not in the list) has even perform 35% better than Gold. It’s not an inflationary play, at least not yet, since Commodities are near the bottom of the list with a mere 5% YTD return. It’s a “something is not right with the fiat system” play. European and EM equities are next in the list with almost half the return of gold. The valuation gap between the US and Europe and particularly with EM has push investors into those markets. Bitcoin may not be the best performer of the list for the 4th time over the last 15 years. US stocks are in the middle of the pack, with decent returns even after good years such as ‘23 and ‘24. At the bottom of the list we can find a strange barbell: both the long end of the treasury curve and cash, are the worst performers. Cash is likely to end the year yielding even less, but it’s not clear what will happen to the long end. And long duration bonds will influence the performance of the rest of the asset classes, particularly equities. 2025 looks like a transition year, but it’s not clear exactly where the market is transitioning to. Will it be dominated by Monetary and fiscal policy or will it be dominated by earnings and AI?

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