Commodities, currencies, world stocks and most foreign bonds disappointed investors in 2011. In most instances, the more exposure one had to non-dollar denominated debt or equity, the more serious the setback.
Not to be deterred, many are beginning to look ahead to 2012. Indeed, some of the upbeat prognostications include greater riches for investing in silver miners, materials-rich Brazil and oil-rich Canada.
For example, if silver surged in price, the Global X Silver Miner ETF (SIL) could be a direct beneficiary. You’d probably need to believe that the mega-bull for silver in early ‘11 was rational, rather than enormously speculative.
Then there are the bullish calls for Brazil ETFs. Since China lowered its bank reserve requirements on 11/30, iShares MSCI Brazil (EWZ) has rallied more than 10%. If China continues to loosen monetary and fiscal policy, the country may import a massive quantity of materials as well as agricultural products and other commodities from Brazil.
And then there are those who are choosing to look north of the border. Canada is the second largest non-OPEC producer and iShares MSCI Canada Fund (EWC) has been outperforming many developed world (non-U.S.) ETFs in the last few months. (Not that being the lesser of international evils is a great case for investing.)
In truth, the financial markets have yet to commit to the notion that the Eurozone can contain its debt woes. Until that happens, unhedged foreign ETFs as well as dollar-priced commodities may be too volatile for the comfort of some investors.
On the other hand, you can track how the market feels about the Eurozone and its controversial currency. The CurrencyShares Euro Trust (FXE) will need to recover and hold above a 50-day moving average before unhedged foreign equities or commodities begin attracting more interest.
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Disclosure: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships.