Money
Time
To Go
Foreign
These are among the
best ETFs for getting
into diversifi ed
overseas investments.
By Dan Weil
ITH THE DOLLAR DROPPING TO ONE-
W
year lows against the euro and other
major currencies, now is the time
to consider exchange-traded funds
(ETFs) that invest in foreign curren-
cies, foreign stocks and bonds, and
commodities, experts say. rency seemed to represent the most Michael Sheldon, chief invest-
The vicious U.S. recession pres- secure investment. ment strategist at RDM Financial
ents problems for the dollar, invest- But with stability returning to the Group in Westport, Conn., sees rosi-
ment insiders say. In addition, the fi nancial system, and the Federal er economic prospects overseas than
Obama administration’s massive fi s- Reserve keeping interest rates at just in the United States.
cal stimulus is expected to produce about zero, investors are looking for “For investors looking to benefi ts
a budget defi cit of almost $2 trillion the superior returns through other through ETFS, several choices are
this year. Government debt probably currencies. available. There are ETFs you can use
will escalate to 56 percent of GDP at Bradley Kay, an ETF strate- to benefi t when the dollar declines
the same time. gist for the vaunted research fi rm against the currencies of developed
“The huge defi cits and debt don’t Morningstar, tells Newsmax that the countries. And you can benefi t from
bode well for the dollar,” James dollar could be entering a long-term ETFs allowing you to short the dollar
Holtzman of Legend Financial downtrend. “There’s the rising debt versus emerging market countries.”
Advisors in Pittsburgh tells that America is carrying and the And the following offer possibili-
Newsmax. “Low interest rates won’t probable long-term shift of curren- ties to do just that:
drive investors to the dollar, either. cy reserves from an overwhelming
These other concerns are outweigh- dollar-denominated orientation to Currency Fund: UDN
ing the dollar’s safe-haven effect.” euros,” he says. When it comes to betting on
Ironically, the fi nancial crisis was Another situation could lead to a developed-country currencies,
good for the dollar. drastic short-term devaluation, Kay many experts recommend The
Investors ignored the fact that says: “If central banks lose faith in PowerShares DB US Dollar Bearish
the meltdown emanated from the U.S. bonds as a reserve and dump Fund (Ticker: UDN). It’s based
T
O
O
H
United States and snapped up dol- those . . . but that doesn’t seem to be on the Deutsche Bank Short US
P
C
K
lars, as the world’s sole reserve cur- the case now.” Dollar Index (USDX). The index is I
S
T
O
86 NEWSMAX MAXLIFE / NOVEMBER 2009
86_MONEY_dollaretfs.indd 86 9/30/09 8:04 PM
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