Time to draw a balance for 2010
Here you can find the results of the product I designed (Issued by Commerzbank traded on the Swiss Exchange under ticker "CBETF")
Dr. Costa Comstage ETF Basket more information about the product are also available on the Commerzbank website
Performance since February 2010 + 10.02% in Swiss Francs vs. -0.38% of the Swiss Market Index (SMI).

WINNING IN 2011
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The Year of Innovation ?
Stocks are normally ranked by market capitalization and other financial ratios. What investors usually
do not always do is think about the most innovative companies that produced very good results in 2010 and will likely do so in 2011. Investors should consider owning shares in several innovative companies that maintain their market leadership through continuous innovation. This is not applicable just to technology related companies but pretty much every field - including financials.

Commodities
Investors that wisely diversified with an exposure to a broad commodity index should have closed a positive 2010. Will the trend continue in 2011? Given the amount of liquidity made available in the markets and the various demand/supply imbalances (copper, cotton etc.) commodities will continue to raise in 2011 but so will their volatility. For this reason it has become increasingly difficult to bet on individual commodities hence I continue to recommend exposure through an ETF linked to a broad index to include at least 25% in precious metals. Oil can also reach over 100$ per barrel by June 2011.

Additionally, I recommend investing a small portion of the portfolio in companies involved in rare commodities like Lithium where in the next years demand is expected to increase from 4 to 20 billion us$.

European Renaissance or Revolution ?
I believe that despite the debt crisis Economic recovery in Europe will be sufficient to keep the markets higher. This said Europe needs a clearer and more common strategy to tackle the crisis.
Without a swift resolution negative consequences can be seen on the Euro and refinancing costs for countries like Spain.

USA and the Dollar
The tax cut deal can translate into a positive year of recovery for the U.S. so I do think that there
are still opportunities for equities investors, particularly European ones given the lower USD.
To achieve that we really need some improvement in unemployment figures and housing. Additionally, while Europe struggle with their Sovereign Debt issues, the US States and Municipalities might face difficulties in 2011.

Japan
A retreat of the yen vs the US$ can make the Japanese market very interesting (this happened already in 1995). Given that the Yen is at a 15 years high this could be expected and drive a rally in the Japanese Stock Market.

Strategy Summary

- Innovative companies should be part of every portfolio - these companies that lead in their
market not due to monopoly but through competitive innovation;
- Commodities will continue to raise in 2011. This is mostly driven by demand and supply imbalances
and paper money supply. Volatility will be high so I recommend a broad exposure. Oil might reach over 100$ a barrel.
- Europe growth and recovery will continue. On the political font Europe needs more unity to address
the current financial issues.
- The U.S. Economy should benefit from the tax cut deal and hopefully will soon reduce unemployment figures. If this doesn't happen and there will be more intervention the U.S. dollar will be affected.
- Japan: Interesting market in consideration of a possible retreat of the Yen vs the US$ in 2011.