November 16, 2008: The Axis of Revival
Launching bets on a worldwide recovery is not something I would recommend at this time. I have placed selective bets on a few stocks with generous dividends that are well-covered by profits in stable industries and the ETFs of various non-junk bond portfolios such as BSV, LQD,PFF, PGF, SHY, TIP and BWX. As mentioned in a previous blog, I also like Fidelity's Strategic Income Fund (FSICX).
I also am gradually - very gradually- adding to ETFs in three countries that are likely to be leaders in the eventual recovery. These are the iShares MSCI Switzerland Index Fund ETF (EWL), iShares MSCI Singapore Index Fund (EWS) and the iShares Morningstar Large Value Index Fund (JKF) of U.S. companies.
Why these three? Simply, they are excellent tracking indexes of three countries that contain excellent diversity of locale in a global recovery, which will spread from region to region (such as the current deep recession). All three countries value free trade, open commerce and maintain a legacy of being a safe haven for one's hard-earned (or not so hard earned, or stolen, extorted or bribed) money. These ETFs are overweight on financials, which may be the first sector to show signs of life worldwide. All three are engines of investment energy which will spread from Switzerland, the U.S. and Switzerland elsewhere. There is less downside risk with the three ETFs than others in their regions, so with a rise from the depths of recession these is a mitigation of potential loss in case the current economic turmoil lasts longer and is more severe than a typical recession.
I do not wish to create the impression that I am stuck on stupid holding dogmatically screaming BUY, BUY, BUY only the above securities. What I am saying in this piece is that the investor should remain income oriented, dividend oriented and begin to stake out positions in securities that will show promise and results in a recovery, but will not be nearly as speculative as BRIC-type investments banking on the hope that China, Russia, India, Brazil and their ilk refrain from confiscating capital once its purpose has been served, or tax just about everything out the ying-yang unless sufficient bribes are gifted to those in authority.
I also am gradually - very gradually- adding to ETFs in three countries that are likely to be leaders in the eventual recovery. These are the iShares MSCI Switzerland Index Fund ETF (EWL), iShares MSCI Singapore Index Fund (EWS) and the iShares Morningstar Large Value Index Fund (JKF) of U.S. companies.
Why these three? Simply, they are excellent tracking indexes of three countries that contain excellent diversity of locale in a global recovery, which will spread from region to region (such as the current deep recession). All three countries value free trade, open commerce and maintain a legacy of being a safe haven for one's hard-earned (or not so hard earned, or stolen, extorted or bribed) money. These ETFs are overweight on financials, which may be the first sector to show signs of life worldwide. All three are engines of investment energy which will spread from Switzerland, the U.S. and Switzerland elsewhere. There is less downside risk with the three ETFs than others in their regions, so with a rise from the depths of recession these is a mitigation of potential loss in case the current economic turmoil lasts longer and is more severe than a typical recession.
I do not wish to create the impression that I am stuck on stupid holding dogmatically screaming BUY, BUY, BUY only the above securities. What I am saying in this piece is that the investor should remain income oriented, dividend oriented and begin to stake out positions in securities that will show promise and results in a recovery, but will not be nearly as speculative as BRIC-type investments banking on the hope that China, Russia, India, Brazil and their ilk refrain from confiscating capital once its purpose has been served, or tax just about everything out the ying-yang unless sufficient bribes are gifted to those in authority.
posted by T @ 11/16/2008 06:42:00 PM
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