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investing in 2013

Article Index

How to Invest in E-Cigs: The Cigarette of the 21st Century

By , Money Morning -

They look like cigarettes, feel like cigarettes, taste like cigarettes - and, smokers will tell you - satisfy the craving for a smoke.

But electronic cigarettes, or e-cigs, don't have any of the offensive smoke that's so harmful to health. Instead, they feature an odorless vapor in which nicotine is delivered to the user. And they're sometimes allowed in public places where cigarettes are banned.

Studies show e-cigs make smoking healthier for smokers and those around them, while also helping smokers quit.

Plus, e-cigs cost about half as much as regular cigarettes.

Big tobacco continues to place bets that electronic cigarettes can keep the tobacco industry and its annual sales north of $750 billion and growing.

Altria Group Inc. (NYSE: MO), the world's biggest tobacco company and parent company of Philip Morris USA, is the last of the three major U.S. tobacco firms to get into the e-cigs game.

"There is no denying that adult tobacco consumers have shown interest in it," Marty Barrington, Altria's CEO, told investors during an earnings conference call last week.

Thanks to increased health awareness, as well as the introduction of several taxes which have led to the price of packs more than tripling in some cities, cigarette sales began declining over15 years ago and continue to do so, falling 6.2% in the first quarter of 2013.

Even though e-cigs were introduced almost 10 years ago, they are just starting to take off. Sales in the U.S. totaled $500 million in 2012 and are expected to double to $1 billion in 2013.

And a recent study by the Centers for Disease Control and Prevention found that 21% of adults who smoke regular cigarettes had used e-cigs in 2011, up from 10% in 2010.

So, now that e-cigs are growing more popular, what's the best way to invest in them?

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The 10 Secrets of Successful Investing

By , Executive Editor, Money Morning -

For Sir John Marks Templeton, the road not taken really did make all the difference in the world.

A true contrarian, the legendary investor became a billionaire by "avoiding the herd".

He bought low, sold high, and was always working against the grains of extreme bullish and bearish sentiment.

In fact, it is when the streets were the bloodiest that Templeton became the most eager to invest.

It was at these moments of what Templeton called "points of maximum pessimism" that he began to wade in snapping up rock bottom bargains along the way..

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The Best Investments to Play Emerging Market Growth May Surprise You

By , Money Morning -

If you're looking for ways to profit from soaring emerging market growth, you don't have to go overseas.

Some of the best investments to play emerging economies are in the United States.

Investors need exposure to emerging market growth, as U.S. GDP grew a paltry 2.2% last year, ranking 137th worldwide. The prospects for this year don't look much better.

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The Best Investments for a Market Sell-Off

By , Money Morning -

With fears of a market sell-off growing, you can survive a downturn if you know the best investments to make now.

For example, one way savvy investors navigate through volatile markets is by buying inverse funds.

Inverse funds enable you to make money when markets fall, while lowering your risk and protecting the value of your investments in the long run by smoothing out volatility.

Here are some of the best investments to make when the market's about to slide.

The Seven Best Investments for 2013

By , Executive Editor, Money Morning -

A year ago, I asked each of our experts here at Money Map Press to recommend their best investment ideas for the 12 months to come.
Of the five stocks our experts recommended in "The Five Stocks You Have to Own in 2012," two more than doubled in price. And the biggest winner posted a peak gain of 153%.
A year later, here we are with a fresh set of recommendations for 2013. I talked to each of our in-house gurus - including Chief Investment Strategist Keith Fitz-Gerald, gold-and-natural-resources expert Peter Krauth, high-tech maven Michael A. Robinson - and asked each for their single-best investment idea for the rest of this year.
Take a look...

Best Investments 2013: What to Buy as Global “Currency Wars” Begin

By , Money Morning -

Japanese Prime Minister Abe's recent success in talking the yen lower against other currencies has increased fears over "currency wars." Now investors are on the hunt for the best investments to profit from central bankers' "race to the bottom" in 2013.

As we've pointed out, the Japanese have done nothing overt to weaken the yen - yet. Markets were massively long the Japanese currency and, when Prime Minister Abe called for "unlimited easing" during the election campaign last year and in the run-up to selecting a new Bank of Japan governor, that was all traders needed to hear to begin selling their yen long bets and taking out short positions.

Abe's great success was in getting the market to do all of the heavy lifting for him.

In fact, Abe has been a little too successful. Minister of Finance Taro Aso told reporters in Tokyo on Friday that the yen had weakened too quickly, which prompted an immediate reversal in the currency markets.

Aso's comments came after remarks by European Central Bank President Mario Draghi Thursday raising concerns that the recent strength of the euro might derail the recovery just gathering momentum in Europe now.

Looking at the interplay of comments from Draghi and Aso last week, it is tempting to think that all of this commotion in the currency markets is being coordinated at the highest level of central banking.

But, with the exception of China, which has been quietly pushing the renminbi toward the lower end of its trading range, no one has done anything. It's all just talk.

In the financial markets, however, talk is a big industry. Talk gets people to put on trades and that is how bankers and brokers make money.

This leaves investors wondering the best currencies to invest in to profit from these fluctuating values, which is why Morgan Stanley developed a currency war basket trade.

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How to Invest in 2013 Without Losing Your Shirt

By , Executive Editor, Money Morning -

Four years after falling to 6,600, the Dow pushed back above 14,000 last week.
Judging from the mail I get every day from Money Morning readers, it's clear that investors are struggling with how to make sense of these markets. Worse, an overwhelming majority are now afraid that the rally will leave them behind.
So, what's an individual investor to do? Do you pile in with the rest of the "herd," or sit on the sidelines and risk getting left behind?
I put those questions to Chief Investment Strategist Keith Fitz-Gerald, and he made five simple points you've got to know...

Investing in 2013: Watch These Emerging Market Rebounders

By , Money Morning -

Broadly speaking, 2012 was an excellent year for investing in emerging markets stocks and ETFs - making some of them a good bet for investing in 2013.

The returns offered by the iShares MSCI Emerging Markets Index Fund (NYSE: EEM), which has almost $51 billion in assets under management and is used by many professional investors as an emerging markets benchmark, indicate as much. EEM, the second-largest emerging markets ETF, returned 13.4% last year.

Given that EEM offers exposure (to varying degrees) to more than 20 countries, the ETF's 2012 performance could leave some investors thinking the just completed year was one big party for developing market equities. Unfortunately, that was not the case as some of the developing world's marquee countries, at least at the ETF level, were absolute laggards.

So while investors were tantalized by the jaw-dropping returns generated by ETFs tracking the likes of Mexico, the Philippines and Thailand just to name a few, chances are there were some mediocre performances from ETFs tracking countries in the same region.

However, there is an important factor when it comes to investing in emerging markets and it is one that runs counter to conventional wisdom.

The conventional wisdom is that it's best to avoid laggards and embrace leaders. But with emerging markets ETFs, they take turns moving between the leaders and laggards categories.

For example, the iShares MSCI Thailand Investable Market Index Fund (NYSE: THD) finished 2011 in the red. In 2012, THD gained over 36%, making it one of the best ETFs tracking any asset class.

While that doesn't mean THD is bound to be a laggard this year, it does mean some emerging markets funds that left investors with sour tastes in their mouths last year have the potential to soar in 2013.

Here are a couple to consider.

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8 Commodities You Should Be Investing In

By , Money Morning -

Morgan Stanley (NYSE: MS), in its newly released Commodity Manual, just delivered good news for anyone investing in commodities in 2013.

The report gives a bullish outlook in 2013 and 2014 for eight of 14 commodities it evaluated. Estimated two-year gains range from 3.05% to 17.3%.

Money Morning Global Resources Specialist Peter Krauth agrees most commodities will perform well. In fact, he projects even higher growth than Morgan Stanley's outlook.

"With central banks on their virtually uninterrupted fiat money-printing spree bound to continue for the next few years, hard assets remain a great place to be," Krauth says. "That being said, some commodities will undoubtedly do better than others."

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Investing in 2013: Finally Time for the Copper ETF?

By , Contributing Writer, Money Morning -

A huge opportunity for copper investing in 2013 could be on the market soon - that is, unless half of the "red metal" industry gets its way.

A group of copper consumers is accusing the U.S. Securities and Exchange Commission (SEC) of being "arbitrary and capricious" when last month it approved the JPMorgan XF Physical Copper Trust, the first-ever U.S. copper exchange-traded fund (ETF) backed by the metal itself. The fund had a two-year wait for the green light.

The trust initially plans to hold 61,800 metric tons of copper in warehouses worldwide. That is equivalent to about 27% of the copper held in London Metal Exchange's (LME) global network of warehouses.

This strategy of holding physical metal is similar to many of the precious metals ETFs on the market, such as the SPDR Gold Trust (NYSE: GLD).

But now many in the copper industry, including fabricators who account for about half of U.S. copper demand, claim the SEC had insufficient evidence to conclude the product would not affect the metal's supply, according to the Financial Times.

The group says the fund would "obviously drive up the price of copper available for immediate delivery and create shortages of such supply," and would remove as much as 30% of the copper available for immediate delivery.

Sen. Carl Levin, D-MI, also disapproved, saying it would be a "blow to American businesses and consumers" and "allow speculators to create a squeeze on the market."

But the SEC disagrees.

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Investing in 2013: Are Chinese Solar Stocks Worth All the Recent Hype?

By , Money Morning -

Here's something you can safely say about China: They get things done.

That point was driven home to me a few years ago by a former Southern Company nuclear engineer who was consulting on building nuclear reactors in China.

"There are two things you can say about the Chinese way of doing things," he said admiringly, "one, once they decide to build a facility, it gets built and two, they bring it in on time."

He also noted that the builders took great pride in their work and if they say the cement was going to be laid by a certain date, the crew worked overtime and weekends to bring it in on time-all without overtime pay.

And the one thing a command economy like China has going for it is once they site a project, it gets built. There are no environmental impact studies, no legal issues, no historical impact hearings, and no worries about displaced families who may have lived on the land for centuries.

I bring it up because now it looks like the Chinese are back in the renewable energy business leading to a bull stampede into Chinese solar stocks.

China's Renewed Drive Into Green Energy

In early January, government officials announced at a national energy conference that they intend to add 10 gigawatts (GW) of installed solar power capacity this year, up from 7 GW at the end of last year.

The goal for 2013 will put China within easy reach of its stated target of 21 GW of installed solar power capacity by 2015.

That followed an announcement in December that China was going to provide $2 billion in subsidies for the country's solar industry.

And now the green energy community around the world is very excited that at least one major nation is willing to step up and stand behind its renewables industries and offer some incentives.

It is bit of a turnaround for an industry that had fallen on some hard times.

Over the past year in the United States, we saw what happened with some of the best intentioned government-driven green energy programs.

Can anyone say "Solyndra"? Or, "once bitten, twice shy"?

Then Germans pulled their solar and wind tax credits and subsidies. And now with the country's economy headed into recession, it's unlikely the Germans will be back on the renewables bandwagon anytime soon.

So will China's renewed push into renewables create a new boom for solar and wind stocks?

Here's what to expect.

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Investing in 2013: Don't Ignore this Huge Shift in China

By , Contributing Writer, Money Morning -

When looking for hot spots for investing in 2013, investors must consider this major trade shift happening in China.

You see, China is the world's largest consumer of grains. That's not surprising considering China's population is 1.3 billion, with an additional 8 million children born each year.

China historically has been largely self-sufficient in most grain categories, rarely importing products like corn and wheat.

But that is changing

China is becoming a net importer of grains.

As Rabobank (one of the largest lenders in global agribusiness) analyst Erin FitzPatrick told AgriMoney, "This is something that the market should be looking at."

Here's why.

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What the Fiscal Cliff Deal Means for Investing in 2013

By , Money Morning -

Stock markets surged on the first day of trading following the scaled-down fiscal cliff deal, but if there was ever a "Band-Aid" fix, this is it. That's because the deal failed to address three key financial problems. The debt ceiling, the automatic spending cuts, and an expired budget are all still issues that need to […]

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