ETF Coping Strategies for the Economic Crisis

In the midst of staggering losses and the downfall of the market, stocks seem relatively cheap and some find relief in buying beaten down index funds as ETFs.

As the financial crisis still continues to unfold, Ben Stein offers three options that can help investors recover from the devastating losses that were suffered and calm the affects of the derivatives and mortgage crisis. 

First, he suggests buying ETFs that have been hammered. (We, of course, say to follow the trend and wait until they move above their 50-day or 200-day moving averages).

Secondly, Stein recommends saving more in short-term Treasuries. 

Lastly, he suggests buying Cohen & Steers Quality Income Realty Fund (RQI) the high-income, leveraged REIT index fund. 

What’s amazing is that here is a guy who has written several books, served as a presidential speechwriter and he’s going through the same thing the average investor does.  We’ve always loved his honesty; he is not claiming to be smart, but is definitely straightforward. He’s lost money, and he doesn’t relish looking through his portfolio at a time like this.

The fund that Stein recommends, RQI, yields an impressive 28%.  Based on our strategy, it’s still off both the 50-day and 200-day moving averages, but it certainly is an interesting pick, especially if it keeps up this kind of yield.

Comments

[slip:]

Ben Stein recommended RQI at around 20. It is now 6 and change. Good call.

2008 Nov 10 10:54 AM

[Bric:]

"RQI, yields an impressive 28%." yes but for how long and how long till the stock crumbles.

2008 Nov 14 11:51 AM

[User 300670:]

I just got off the phone with Cohen and Steers. Although RQI pays a $.15 monthly dividend now, that will all change next year. The gentleman did not say by how much, but you can bet that the dividend will be cut. To what?? Who knows. Maybe at a current price of $3.50 it does not matter.

2008 Nov 18 12:54 PM

[ms boomer:]

"Buy what you understand." I did not and now I am paying the price for believing that Ben Stein did know what he was doing. Holding now only because I have no idea where to go to get my money back and there is little left to lose. What a cost for a few pennies of dividend. Amazing! Anyone think they know what will happen next? Will they just go to zero or what?

2008 Nov 18 08:54 PM

[Citizen Anon:]

Yeah, I'm hating Ben right now. I bought 500 at $20 on his recommendation. Now it is at $1.94. Thanks a lot Ben. I thought you were an expert. I think maybe you are a crook.

2008 Nov 21 11:45 AM