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Tuesday July 28, 2009
Bottarelli's bets: A three-fold strategy
The trading expert, with Bottarelli Research, was recently interviewed by Ian Wyatt, editor of SmallCap Investor Pro and offers a trio of favorite ETFs for metals, currency and international exposure.. "Play #1: Metals Exposure "This play comes in the form of the Market Vectors Gold Miners ETF (NYSE: GDX), which I consider the best all-encompassing metals play your money can buy. "The GDX tracks the performance of the AMEX Gold Miners index, which invests at least 80% of its total assets in companies involved in the gold mining industry. 
"By owning the GDX, you get exposure to major metals companies like Agnico Eagle Mines, Barrick Gold, Goldcorp, and Newmont Mining. "Without question, this is the very best way to own all of these major metals companies using one liquid and simple to follow basket. "Play #2: International Exposure "The second play comes in the form of the iShares MSCI Brazil Index (NYSE: EWZ). You probably don't realize this, but over the last 5 years, the best performing fund (rated #1 overall by Barron's) is the iShares MSCI Brazil Index with a 32.74% return. "It beat out China, gold, value and growth, technology, small-cap funds, you name it. And guess what? Brazil is just getting started. Under Brazil's president Luiz Inacio Lula da Silva, the country's average monthly salary has climbed 22% since 2003. "This means that the country's lower-class citizens are becoming active consumers. When a country's population collectively and simultaneously increases their economic position, that's when you see the most powerful growth. "By owning the EWZ, you can not only diversify away from the United States, but you can also profit from Brazil's powerful growth. Play #3: A falling U.S. dollar "The third play comes in the form of the Currency Shares Canadian Dollar Trust (NYSE: FXC), which tracks the price performance of the Canadian dollar. "Since Canada's countryside is so rich in metals, their currency is backed by one of the strongest gold/silver deposits on earth. This will offer the Canadian dollar strength that's not enjoyed by the U.S. dollar. "Plus, since Canada does not suffer from the same financial troubles as the United States, their currency looks to be a solid out-performer for the remainder of the year." |
News Flash
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"My best advice is three-fold: be sure that you own metals exposure; diversify with international exposure; and own a position that'll strengthen when the U.S. Dollar begins to fall," says Bryan Bottarelli.