Investors were given an insight into where to put their money at the latest Bermuda Investment Advisory Services' quarterly market briefing.

They listened to chief operating officer Robert Pires and vice-president and chief financial officer Mark Melvin talk about investments during a tough trading period and what will happen to them in the future at the meeting held in their offices in Par-la-ville Road yesterday.

Mr. Melvin kicked-off the meeting by giving a presentation on the sub-prime crisis, including the market trends building up to it over the past decade, such as the dot.com boom and bust, the terrorist attacks of 9/11, the US recession and the Enron scandal.

He spoke about areas to invest in, in light of bond yields being at an all-time low and stocks representing an uncertain return, with clients looking for good yields, ratings and liquidity.

Delegates then watched a You Tube video entitled 'The Last Laugh' with comedians John Bird and John Fortune attempting to unravel the complexities of and explain the sub-prime issue in a light-hearted manner.

Mr. Pires then took to the stage and gave an overview of how the global markets had performed in the past, citing the Citigroup Treasury, which was up 2.7 percent for the quarter to date and 11.9 percent for the year, as proof that treasury bonds had done well because investors believed they were the safest bet, while the Citigroup Corporate was up one percent for the quarter and 5.5 percent for the year, due mainly to the high take-up in treasuries, and the DJ AIG Commodities increased by six percent and 17.7 percent for the quarter and year respectively.

Meanwhile, the FTSE World Index was down nine percent for the quarter and 2.97 percent for the year, the Standard & Poor's 500 Index was down 6.65 percent and 3.5 percent for the respective periods and the Bermuda Stock Exchange Index declined by 0.1 percent for the quarter and 0.7 percent for the year, he said.

But, Mr. Pires recommended investors to put their money into the agricultural market, as reflected in the performance of DJ AIG Agriculture, which soared by 9.9 percent for the quarter and 37.9 percent for the year.

"The new thing we have done in our clients' portfolios is the agricultural exposure to the commodities with 25 percent in sugar, 25 percent in soya, 25 percent in wheat and 25 percent in corn, which was up 37.9 percent for the year and we got into it at the end of November," he said. "We have had a tremendous performance in our portfolios as a result."

As a result of the impact of the sub-prime factor, which caused treasury bonds to go up, the company focused its customers' portfolios accordingly, said Mr. Pires, with an increase in the proportion of fixed income investment from 34 percent to 43 percent and cash from one percent to 12 percent, while equities were dropped from 65 percent to 45 percent for the BIAS Global Balanced Fund between September 30, 2007 and February 13, 2008.

Elsewhere, Mr. Pires said that sub-prime issues had also forced a rethink on fixed income investments resulting in improved credit quality and liquidity through increased holdings in US treasuries, raised credit standard on new purchases to AA, reduced financials and an extended duration by selling LIBOR-linked bonds.

On the equity side, there has been increased exposure to defensive sectors, with underweight financials by eight percent, overweight healthcare by four percent, overweight utilities by four percent and an eight percent stake in soft commodities relative to the FTSE, while DB agriculture has outperformed the index by more than 25 percent, he said.

"There will be weakness as sub-prime problems permeate the broader economy and higher unemployment and lower consumer spending, while the dollar level should support exports and aggressive Fed action should help foster a quick recovery," said Mr. Pires.

In conclusion, he said that further weakness on more sub-prime write-offs are anticipated on the equity front, with the cost of debt finance cutting into corporate profits and opportunities arising for companies with strong balance sheets and good credit ratings. Healthcare, utilities and staples will also provide a safe haven and US multi-nationals should outperform, according to predictions.

Agricultural commodities provide the best opportunity for investment, supported by increased demand from emerging markets and increased bio-fuel usage, while base metals and energy could falter on weak economic numbers and precious metals seem set to move higher on inflation and economic concerns, Mr. Pires surmised.