Welcome to Money Morning - Only the News You Can Profit From.

Skip to content

Inverse Funds - Money Morning - Only the News You Can Proft From.

Investment Strategies: Why Dividends, Inverse Funds, "Glocal" Stocks, Commodities and Emerging Economies Are the Places to Be

April 27, 2011

[Editor's Note: In this latest installment of Money Morning's "Quarterly Report" forecast series, Executive Editor William Patalon III queried Chief Investment Strategist Keith Fitz-Gerald about the wild-and-wooly first quarter - after which the two zeroed in on the investment strategies and investment choices investors need to embrace in the months to come. Still to come: Our report on China.]

Money Morning Staff Reports

After a wild first quarter that included unrest in Egypt, Libya and Saudi Arabia, a spike in oil and gasoline prices, an apparent acceleration of inflation and continued global debt fears, investors need to embrace investment strategies and investment choices that will provide returns even as they manage risk, says Money Morning Chief Investment Strategist Keith Fitz-Gerald.

"In many ways, we are truly entering uncharted territory," Fitz-Gerald said.Money Morning Quarterly Report

In a wide-ranging interview with Executive Editor William Patalon III that represents the latest installment of Money Morning's "Quarterly Report" series for the 2011 second quarter, Fitz-Gerald talked about the first quarter and provided a detailed look at what he sees ahead. For instance, Fitz-Gerald said that:

  • Despite the bull market in U.S. stocks, the U.S. economy and accompanying financial system isn't as strong as it looks, noting that "there are still massive cracks in the system."
  • Investors should make sure to watch the U.S. Federal Reserve, since its decision to continue or to end its current monetary-policy strategies could determine where U.S. stock prices go from here.
  • Prices will continue their general upward trajectory, which is why he ultimately sees oil at $150 a barrel, gold at $2,500 an ounce and silver crossing the $50-an-ounce threshold.

Fitz-Gerald also detailed some of the investment strategies investors needed to consider, including the use of "inverse funds," dividend-paying stocks, and so-called "glocal" stock plays. "Glocal" stocks are the term Fitz-Gerald uses to describe large, U.S.-based multinational corporations whose global operations include a local presence – especially in the crucial markets of China and Greater Asia. Most of these companies are publicly traded, and have their shares listed on the Standard & Poor's 500 Index today.

What follows is an edited transcript of the question-and-answer session that Patalon hosted with Fitz-Gerald.

  • About the Author
  • Syndicate

With this Bear-Market Insurance, You Can Keep Riding the Bull

March 19, 2010

By Martin Hutchinson, Global Investing Strategist, Money Morning

During the last few weeks, the U.S. stock market has recovered from its mid-February swoon and clawed its way to a new high for the year – returning share prices to levels not seen since late 2008.

At this point, based on consideration of its change in value since the money supply inflation began in early 1995, stocks appear to be substantially overvalued, perhaps by as much as 40% to 50%.

However, if our experiences of the late 1990s taught us anything, it's that the stock market can remain overvalued for years – meaning investors who opt out of the market completely risk getting left behind.

Still, given the soaring run-up we've seen since the stock market's March 9, 2009 nadir, I thought this would be an excellent time to review the ways nervous investors can protect themselves – even as they remain invested. That's just good, sound risk management.

And there is a way to achieve both goals – with a type of bear-market "insurance' that's fairly easy to use.

To find out about “bear-market insurance,” please read on…

  • About the Author
  • Syndicate