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.