Friday, October 30, 2009

Investment Options

By Jonathan Tse

Although stocks have been seen to be steadily rising these past few weeks, it seems that stocks prices have recently stopped rising and are beginning to fall again. Sadly, hopes that the economy may have finally been coming out of the recession have been wrong. It is thought that there will still be some time before true recovery of the economy arrives. A reason for this is the low consumer confidence rating, as consumers are still not very confident to invest as much as they would have before the recession. It is said that the current economic situation parallels the recession of 1973-74 in which the market fell more than 45% and then rebounded 60-70%.
A strategy to make profit during this time of economic hard times is to build a portfolio that is split into five parts: US stocks with constant dividends, mature foreign stocks and bonds, stocks and bonds from emerging markets, oil and commodity stocks and bonds, and bonds that return based on inflation. This type of portfolio diversification will allow investors to make decent profits even while still investing in cheap investments that other investors are afraid to take part in. Exchange traded funds (ETF) are also another option to invest in while the economy is not doing too well. There are five recently launched ETFs that appear to be profitable and will help to diversify one’s portfolio. Some rising countries have new ETFs which investors should look into. The top five include: Vietnam, Indonesia, Peru, Colombia, and Nordic region. International investments are some things to look into to invest in while the economy is in recession.

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