Recent Articles
New: Be the first to
follow us on Twitter.


China Stocks

More Articles...

Consumer Stocks

More Articles...

Energy Stocks

More Articles...

ETFs & Mutual Funds

More Articles...

Global Investing

More Articles...

Gold & Materials Stocks

More Articles...

Income Investing

More Articles...

Industrial Stocks

More Articles...

Healthcare & Biotech

More Articles...

Technology Stocks

More Articles...

Todays Best Investment Ideas
Dollar Bull Fund bets on US gains
Wednesday, August 27, 2008

 "I think the dollar's bullish trend is set to continue, and a further 20% rally from current levels seems not a question of 'if', but 'when,' says Nick Vardy.

The international stock expert and editor of the Global Bull Market Alert explains,"My latest pick, Direxion Funds Dollar Bull 2.5x Fund (DXDBX) is a leveraged bet on a sustained dollar rally." Here's his review.

"After flirting with record lows against the euro in July, the U.S. dollar hit a six-month high against the euro as the economic slowdown outside of the United States gathered pace.

"The popular 'decoupling theory,' that the rest of the world's economies can continue to thrive while the U.S. economy slows, has proven to be bunk. As it turns out, other global economies, not the U.S., are flirting with recession.

"It was recently announced that the 13-nation, euro-area economy shrank in the second quarter, as the economies of Germany, France, and Italy all contracted.

"And because inflation in the eurozone is far too high for comfort, few expect the ECB to cut interest rates before 2009. That means that you can expect European economies, and the Euro, to stagnate during the foreseeable future.

"Relentless negative headlines notwithstanding, the U.S. economy doesn't seem to be in such bad shape after all. The U.S. economy grew at 1.9% in Q2 and a surge in export sales in June probably means that GDP growth for the most recent quarter will be revised upward.

"The U.S economy also has the most to gain from the recent fall in the price of oil and is likely to recover more quickly than its counterparts in Europe and Asia.

"That also means U.S. interest rates will head higher, sooner, to provide a further boost for the dollar. And the dollar’s revival is likely to put to rest talk of global central banks and other large holders of reserve assets diversifying out of the U.S. dollar.

"So how far would a dollar rally go? On measures such as purchasing-power parity, the U.S. dollar still looks cheap against the euro, the Swedish crown, the Swiss frank and the U.K. pound sterling. A further 20% rally from current levels seems not a question of 'if', but 'when.'

"The best way to play the dollar rally is to buy the Direxion Funds Dollar Bull 2.5x Fund -- a leveraged fund that seeks daily returns of 250% of the price performance of the U.S. dollar against six major world currencies: the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc.

"That means a 20% gain in the dollar should translate to a 50% gain in the fund. Place your stop at $28.25. With this kind of leverage, the fund should trade like a fairly volatile stock."

 

Newsletter News & Deals

Sign up now for our free Daily Newsletter



Meet the KCI editors

Join Roger Conrad, Gregg Early, Elliott Gue, and Yiannis Mostrous in San Diego on April 23-24. Call 1-800-832-2330 or go to www.InvestingSummit.com.

 
Dividend Still Don't Lie

Dividends Don't Lie -- by IQ Trends founder Geraldine Weiss -- is one of the all-time great investment books.

Now, editor Kelley Wright is following up this classic with Dividend Still Don't Lie, which can be ordered at a significant discount.

 
Keith Fitz-Gerald: Fiscal Hangover

Get a $10 discount on Keith's new book on global investing -- Fiscal Hangover. Click here.

 
Red, White & Bold

Global expert Carl Delfeld's new book -- Red, White & Bold -- is now available.

 
Gone Fishin' Portfolio

The Oxford Club's Alexander Green has released an exceptional new book-- The Gone Fishin' Portfolio -- which provides an all-weather approach to investing.

 
EconoPower

Mark Skousen's latest book, “EconoPower: How a New Generation of Economists is Transforming the World” (Wiley & Sons), is available for $16.47 (plus shipping) from Amazon.com (retail $24.95).

 
Guide to seasonal trading

Sy Harding has published Beat the Market the Easy Way -- an in-depth review of seasonal market patterns and their application to long-term timing.

 
Dick Davis Dividend

In The Dick Davis Dividend, the investing legend shares a lifetime of insights on investing.