The assets to buy now - November 2014

Property

Buy Germany

Nationwide reports that house prices rose by 9% year-on-year last month, the slowest gain in nine months. The pace of growth looks set to keep softening: mortgage approvals slipped to a 14-month low in September. Stricter lending criteria introduced by the Mortgage Market Review has taken some of the heat out of the market, while the prospect of higher interest rates may be dampening prospective buyers' enthusiasm. They may also have noticed how stretched prices are compared to earnings even the 2008/2009 slump only brought the market down from absurdly overpriced to very overpriced. The US market and second-tier German cities remain better value.

Bonds

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Too dear

One of the main side-effects of quantitative easing (QE) has been the bubble in both government and corporate bond markets. The Bank of England, for instance, kept gilt prices high and yields low by hoovering up a third of our outstanding sovereign bonds. That came on top of a bull market in state debt that began with the conquest of inflation in the early 1980s. So government debt is far too expensive to justify the risks: the end of US QE, a gradual economic recovery and the return of inflation all bode ill. Corporate debt, especially the now misnamed high-yield section, is also too expensive to touch with a bargepole. A junk bond usually offers a double-digit yield; in the QE-era yields fell to under 6%. A renewed downturn would imply a jump in defaults and a stampede out of the market.

Energy

The sliding oil price

Oil prices have fallen by almost 30% since June. There could well be further to go. On the demand side, Chinese and emerging-market growth has cooled, while Europe is also slowing. US shale production is growing rapidly; Libyan supply is recovering, and Saudi Arabia seems in no hurry to cut production to bolster prices. All this is good news for the world economy, however, "giving motorists a break at the pump", as David Fuller points out on Fullertreacymoney.com. American petrol prices have eased to a four-year low. US natural gas, meanwhile, jumped above $4 per million British thermal units this week as it notched upits biggest daily gains since June. The onset of cold weather caused the jump, and the long-term outlook is auspicious too. More and more households and industries are opting for this fossil fuel, which produces less pollution than coal or oil.

Precious metals

Insurance policy

Silver often follows and amplifies gold's movements, and in the latest rout it has once again done slightly worse than the yellow metal. It slumped to a 55-month low of $16 an ounce. This is surprising, notes Capital Economics, as industrial metals have been more resilient and industry accounts for 60% of silver demand. Silver looks likely to outperform gold in the next two years, reckons the consultancy; the global recovery will take the shine off gold, which investors view as a safe haven. But keep in mind that silver is extremely volatile and thus suitable only for the brave. Gold should remain in your portfolio as insurance.

Commodities

Buy miners

While most asset classes are at record or near-record levels, commodities continue to drift downwards. The S&P GSCI index of raw materials prices (which includes oil) has slid by almost a fifth since the summer. Slowing Chinese growth and healthy supplies have hampered industrial metals in recent months, and the pattern is setto continue. However, prices of miners are now looking appealing for bargain hunters, as Matthew Partridge pointed out last week in our free daily investment email, MoneyMorning. One to consider is Rio Tinto (LSE: RIO).

Agricultural commodities haven't done very well recently either. Corn, for example, has slumped by 50% in three years. In the short- and medium-term, prices will be dictated largely by weather conditions. But the long-term trajectory for this segment of the commodity market should be upward.

As the global population expands and climate change worsens, the amount of arable land available will shrink. Fertiliser and farm equipment stocks will allow you to play this structural trend.

Equities

Avoid America

America's S&P 500 index has bounced back to a record highas the economy has gathered pace.We would continue to steer clear of the American market, however, which is setto lose the QE tailwind and is on aneye-wateringly expensive cyclically adjusted price/earnings ratio of 26.

Europe is a better bet, as it is far cheaper and looks set to benefit from eventual money printing by the European Central Bank as it attempts to avoid deflation. Another dose of QE is also a reason to like Japan, as we explain in our cover story this week.

Emerging markets have underperformed their developed counterparts over the past year, but this helps explain why they are cheaper, and some also boast appealing fundamentals for long-term investors.We continue to like Brazil, India, Mexico and the Philippines.