Critically assess the attractions of commodities as an asset class Essay

Critically assess the attractions of commodities as an asset class over the short and long-term - Essay Example The ever-expanding list now also includes products such as financial instruments and stock indexes that trade on a commodity exchange. Commodities can be considered to be an asset class in their own right and long-term investments in the same have resulted in equity-like returns to investors. An investment can generally be considered a separate asset class when its returns are independent of other asset classes; its returns are both positive and significantly different from cash; its return cannot be replicated with a combination of other asset classes. Commodities have all these characteristics and therefore provide considerable investment portfolio diversification opportunities. It provides return and risk opportunities beyond that of simple inflation hedging and has sources of risk and return that are significantly different from and independent of traditional assets such as stocks and bonds. Moreover, its advantage lies primarily in that its risk and return trade-offs cannot be easily replicated through other investment alternatives. Thus commodity investment has enormous growth potential and poses some unique attraction for investors who understand its unique characteristics, benefits and challenges. For instance, commodities generally outperform other asset classes in an expansionary phase and deliver extra-ordinary returns within short periods. Like property, commodities offer low to negative correlation with equities and bonds and fixed income instruments and, therefore, provide a natural balancing and sobering effect on the portfolio. A correlation coefficient is a number between -1 and 1 that measures the degree to which two variables are linearly related. A positive correlative coefficient means that the two variables are directly related, i.e. the value of one will increase or decrease along with the increase or decrease in the other. A negative correlation means that the variables are inversely related and when one

Hrd 276 Essay Example | Topics and Well Written Essays - 500 words

Hrd 276 - Essay Example This review has chosen JetBlue Airways for purposes of organizational culture model simply because the company practices the Denison Organizational Culture Survey (DOCS), a tool of choice that has become effective in assessing the cultural and organizational performance. Using this tool, organizations can now benchmark their cultural scores against the global database. As a result, they can now develop action plans that are geared towards improving their current practices. In an analysis of JetBlue Airways using DOCS tool, both strengths and weaknesses of the organization as they apply in the company performance will be undertaken with respect to adaptability, mission, involvement and consistency (Denison Consulting, 2013). In doing so, specific aspects of an organizations culture in each of the fore mentioned traits and management practices are normally carried out. Adaptability is characterized by a number of traits such as customer focus, creating change and organizational learning. While creating change, JetBlue Airways has been characterized by the ability of the company to being responsive to change. The company responds well with its competitors and with respect to changes in the external environment. However, there is a need for different organizational unit to cooperate in order for Jet Blue to realize more change (Denison Consulting, 2013). Customers focus; on the other hand, requires that all members of the organization understands customer’s wants and needs particularly being an airline company. The last aspect of adaptability is organizational learning whereby failure should be viewed as an opportunity for future improvements. Therefore, this should encourage innovations in the company as the risk takers get re warded. The next factor of explanation of culture is the mission that involves strategic directions and intent; setting