The case for hard assets. (cover story)

The article presents information on the financial conditions in the United States stock markets as of June 1994. According to the author, smart investors are hedging their portfolios of financial assets by buying hard assets. Some famous investors who made huge fortunes from financial assets are diversifying into real estate. Stocks haven't been seriously damaged by the commodity buying frenzy, but they are petering out. The bull market in stocks and bonds and the bear market in raw materials had gone on for too long. For the decade ending December 1993, stocks returned a compound annual 14.9%, long Treasurys 14.7%. The Commodity Research Bureau index of futures prices fell at a 2% annual rate. Agricultural commodities are at their lowest levels in real terms in this century. Oil is cheaper in real terms than it has been since the early 1970s.