Commodities, including oil, have continued to undergo a correction. The prospect of slower global growth has been weighing down on commodity prices for a while now.

Those who have been betting on a secular bull market in commodities will have to wait until a rebound in global growth occurs, and that is not yet in sight.

It appears that some funds, which were heavily weighted in commodities, and hoping for a continuation of the boom, have been hurt badly. Inevitably, given weakening prices, commodity-related stocks are sliding. Niftier investors have been switching into areas such as airlines, retail stores and cruise-ship operators.

Some of the enthusiasm may be overdone, but the assessment is that lower commodity prices will shore up the corporate bottom line and give consumers more disposable income to spend. And, it has been profitable to engage in sector rotation, out of basic-materials and energy and into consumer-discretionary and financials.

Why financials? Well, the consensus reasoning is as follows: lower commodity prices may lead to tame inflation, and hence allow central banks to keep interest rates low. The resulting steep yield curve will help banks rake in more profit.

Canadian and Australian stock markets have come down in tandem with commodity prices. In addition, their sliding currencies have hurt US dollar-based investors in those markets. It is not unusual to see Australia and Canada underperform, as this normally happen in a global down-cycle.

Emerging-market stocks have also come down with a thud. Investors' love affair with this region appears to be over, at least for now. The MSCI emerging-markets index is underperforming the world index, as all earlier notions of decoupling have been jettisoned.

Which region do you want to be overweight nowadays? Well, from the evidence, the good old USA is currently outperforming all others. It doesn't matter what the analysts and strategists say; that's where the money is heading.

Japan was courted by investors in the earlier part of the year and looked pretty hot. But investors got tired of the romance and have been dating much less frequently in the past few weeks. It is no surprise, then, that Japan is again underperforming the world index.

Past experience is that this lady promises much and frequently disappoints. Entry and exit into the Japanese market is only for those with good timing skills. We still hold to the view, though, that in a global up-cycle Japan will outperform on a more consistent basis.

Europe, which had been seriously beaten down, earlier in the year, is looking perkier. It is true that Trichet is mean as hell and won't cut interest rates soon — even as the economy is slowing. But earnings have been somewhat better than expected. In any case, investors are deciding that it's a better place to be than Asia.

And for all the talk from strategists that small-cap stocks are overvalued, — and it is better to shun them in favour of large-caps — the indices show that they are outperforming their bigger brethren in the US. Mind you, we are not making an argument that they should be preferred.

But it is well to point out, as Keynes famously observed, that in investment matters, beauty is often in the eye of the beholder. Don't bet against the crowd unless you have a sound basis for doing so. And don't forget to polish up your timing skills. Love is impermanent, and you have to know when to break off a relationship.

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Iraj Pouyandeh is a Strategist and Senior Portfolio Manager at LOM Asset Management. He manages the LOM Global Equity Fund. For more information on LOM Asset Management please visit www.lomam.com