I don’t offer much advice on investments but after reading a great deal of research today I was thinking about mentioning a few things.
Buy the US Dollar: UUP
China will continue the purchase of our debt because they must keep the value of the Yuan low. China has a goal of 8% GDP growth, they just spent 600 billion on stimulus, and 40% of their economy is based upon trade. It is possible that the percentage of their spending might decrease to a greater focus on domestic spending and the development of a consumer economy, but that is a few years off.
Buy BRIC: EEB
The total emerging market economic picture looks grim because of its coupling with the G7 economies. There are some noticeable pull away stories going on in Brazil and China. Russia has to much corruption and India to much regulation but they both still are focused on growth. Even in an economic downturn these economies own too much of the worlds commodities and youth to completely stall growth. Plus they have positive GDP forecasts (expanding economies) to the G7s negative (contracting).
U.S.A, Commodities, Fixed Income
I would say buy Large Cap stocks, but why? Sure, they will come back and weather the storm, but buy them on the way back up. No reason to loose money short term.
Commodities cannot stay this low forever, but they will need demand to stimulate their price increases. Stay away from here as well.
Fixed income with an emphasis on yield should be the core of all investments right now. Municipal bonds aren’t going anywhere, neither are corporate bonds, and select preferred stocks (the government won’t let them). At least 50% of any investment should be fixed.
I could be wrong on any number of these points, but as of right now these are my recommendations.