Many have waited a long time for a chance to invest directly in India. While closed end funds and ETNs might have been the choice for some, WisdomTree (WSDT.PK) will launch the Wisdom Tree India Earnings Fund (EPI) on February 22, 2008. As with many WisdomTree offerings, the ETF will be fundamentally weighted, measuring the performance of companies incorporated and traded in India that are profitable as of the annual measurement date (of note is that WT defines earnings as net income).

Based on the WisdomTree India Earnings Index, the ETF is designed to mirror its parent index, less 0.88% operating fees, and best the performance of MSCI's India Index, at least according to available backtesting data. EPI's composition includes the following sector weightings:

• Energy: 25.37%
• Materials: 16.17%
• Financials: 13.34%
• Information Technology: 11.5%
• Industrials:8.12%
• Utilities: 6.08%
• Consumer Discretionary: 5.96%
• Telecom Services: 5.81%
• Consumer Staples: 4%
• Health Care: 3.64%

It's doubtless that you've heard as many times as I have over the last few weeks various financial advisors touting large caps, generally, and large cap industrials as the place to be at this point in the economic cycle. More recently, I've also taken great interest in the growing debate regarding bottom fishing in value. Recently, SeekingAlpha ran a story written by the folks at Bespoke Investment Group. That article offered some evidence that "the rally in growth stocks has come to a grinding halt… as value stocks have taken back the reigns of outperformance".

If we are inclined to play into either (or both) of these supposed trends, which options have we? According to this review, we are allowed to purchases ETFs tracking the following, ex-international: 1) Industrials; 2) Large Cap; and, 3) Value, of small-, medium-, and large-cap persuasions.

In an article dated December 30^th, I offered two perspectives for investing in 2008 and beyond. The first view included suggestions for long term positions in commodities (DBA, up 12.1%, CUT, down 7.5%, and RJA, up 4.46%), emerging markets (RSX, down 10.8%, EWW, up 0.26%, and TAO, down 10.6%), and currencies (FXM, up 0.25% and FXA, up 2.66%).

Obviously, my call for investing in Russia (RSX) was premature, and although I believe international real estate in the form of the Chinese offering from Claymore, TAO, continues to be a valuable diversifying play, I'm disinclined to open a position now with China in a short term bear market. Instead, a better international play would have been another diversifier I mentioned, RWX, which is down only 1.6%. (Please note, other options based on international earnings growth as a principle driving element, including McDonald's (MCD) and Unilever (UN) were hard hit as the decoupling argument – considered below – unraveled, though we sold the latter into strength for an overall gain on the position; Berkshire Hathaway (BRK.B), a long term hold, was down substantially less than the Vanguard total market etf (VTI): 1.1% vs. 5.5%.)

The second view, and one for which I took some flack for being "overly complicated" in the words of some readers, turned out to be rather successful, save one component. Let's review some of my thoughts and consider why things developed as they did…

Over the last few days, I've fielded a number of questions – as, likely, uncounted other money managers have – that demand an answer to "What do I do now?"

My response is – "What's your chief concern?" Because what most bothers investors who don't eat and breathe investing as a necessary biological function governs how they will – or will not – allocate their resources. Are you worried about unemployment? Inflation? Subprime lending? Domestic equities? International equities? Emerging markets? Pump prices? If you're worried and you don't know why you're worried – or are worried because the pundits on TV tell you to be fearful – then you need to get a clue before committing potentially hazardous investment actions. And if you're interested in borrowing on margin to start shorting – or have recently taken myriad positions in ProShares short- or ultrashort etfs – having never before done so, please consider the gravity of your newly assumed risk.

One of the problems with "What to Do in 2008" articles is that, regardless of who is relating their picks or pans to you, those picks were not likely selected as a function of your portfolio, property, or business holdings, or of your investment strategy. To whom, then, should you listen? With examples of successes and failures of investments that perchance didn't originate in your noggin, pick your favorite talking head (writing head?) and it's likely they'll receive both accolades and some old fashioned wood-shed treatment. This isn't to say that listening to others' ideas is indicative of shortsightedness or slothfulness. On the contrary – as long as research follows – listen to everyone whose opinion you value is worthy of your time!

And since Seeking Alpha is based on giving folks with respectable credentials opportunities to discuss investment views, I'll give you several views, as well. The options presented below represent our portfolios' possible orientation for the coming year. Garner something from my thoughts, oppose my opinions, whatever: I'm letting you know what I plan to do before/as I do it…Perhaps some of our ideas will synch up!

On December 18, Claymore Securities made good on its promise to increase its ETF offerings by adding a vehicle for folks to diversify into the historically low R^2 world of real estate investment. The ETF is international in nature, with a 100% Chinese weighting.

Launched as The Claymore/AlphaShares China Real Estate ETF (TAO), the vehicle "seeks investment results that correspond generally to the performance, before…fees and expenses, of…the AlphaShares China Real Estate Index." More specifically, the fund seeks a correlation of 0.95 or better to its guiding index by investing in common equities of public companies, as well as in real estate investment trusts. The folks at Claymore will normally invest at least 90% of TAO's total assets across a broad range of share classes, including mainland shares whenever possible, ADRs, ADSs, GDRs, and IDRs. Further, investments in Chinese special administrative regions (including Hong Kong and Macau), are fair game.

With the constant back-and-forth regarding whether or not the US enters a recession, it makes sense to at least consider hedging options other than cash and bonds. I'm inclined to consider large conglomerates with respectable earnings growth, broad product reach, pricing power, and significant international exposure. I give extra weight to companies that fit these requirements and are located abroad.

For example, TV's talking heads have begun heavily touting companies including Colgate-Palmolive (CL) and Proctor & Gamble (PG). To be sure, these are both diversified companies, with solid growth prospects and a massive range of products ranging from toothpaste to floor cleaners. But both are also somewhat expensive on a price-to-earnings basis, with CL trading at 25.22 (21.07 forward) and PG sporting 23.30 (18.83 forward). In fact, the sector's current P/E is 20.58, which is in line with the S&P's ~20.7.

Considering how the emerging markets were treated in November, it's not a surprise that I received several emails asking if I still regarded General Steel Holdings (GSI) as a long term investment since my support of it on November 6, 2007. My response is a resounding yes. When our globally interconnected markets swoon, it is important to consider your equities as a function of the new paradigm – this is an external view. It is also important to review if those equities still represent the spirit of why you originally chose them – study anew the internals.

The US might be entering a recession. Europe's economy might be slowing. No one knows for certain, although an opinion and a few bucks will certainly get you the average Joe's opinion. And while I believe in international diversification to hedge against regional bouts of underperformance, in many cases it is illogical to interpret low R^2 plays – viewed from within any regional market – as being nearly completely decoupled from the global environment. Something that studying international relations taught me is that the more interconnected we become as a collection of nations, the more likely it is that sympathetic propagations of similar sentiment will pervade financial networks. While an ailing US or Europe might not give the world the flu, those other billions of investing compatriots are likely to need some chicken soup.

There are three primary diversification characteristics embodied by Claymore's new ETF, the Claymore/Clear Global Timber Index ETF (AMEX: CUT): capitalization; international diversification; and, correlation. Potential investors must realize that the fund, when added to a portfolio as a diversification instrument, generates these characteristics by interaction with other investments: by itself, it is a non-diversified timber and paper/pulp-products fund.

Firstly, the ETF is not solely comprised of large capitalization companies. In fact, a full 77.5% of the ETFs holdings represent small- and mid-cap corporations. For those with ETFs or individual equities focusing principally on large caps, the following breakdown will offer a modicum of diversification:

Perhaps it's apropos that my wife and I just finished a conversation regarding our Chinese investments, which along with Vanguard's (VWO) and Claymore's (EEB) ETFs, decorate our emerging markets cake. Our holdings in China Life (LFC) and Sinopec (SNP) have experienced impressive growth since we purchased them, which wasn't long after they debuted. Similarly, our new position in General Steel Holdings (GSI) has yielded strong gains.

But with our desire to maintain a little yin with our emerging yang, we craved a hedge against our gains should we experience a continued pummeling of our (long term) Chinese positions. We looked to ProShares. After much anticipation, we found that ProShares' anti-FTSE/Xinhua 25 (FXI) (the UltraShorts on China (FXP)), (as well as an anti-MSCI (EWJ), the UltraShorts on Japan (EWV)) will begin trading today:

With Monday's market swoon, I saw an opportunity to add to our holdings of General Steel Holdings (AMEX: GSI). Essentially a portfolio of steel companies, GSI holds controlling interest in Shaanxi Longmen Steel, Tianjian Daqiuzhuang Metal Sheet Co., and Baotou Steel, as well as serves as an acquisition vehicle for in-process and future steel-related acquisitions.

GSI's unique business plan revolves around acquiring government owned steel companies operating in niche segments of the steel industry – or companies enjoying near monopolies in certain geographic areas – and increasing their profitability and efficiency with "the infusion of applied western management practices, advanced production technologies, and capital resources." The cowboy factor is that GSI intends to acquire its assets by "leveraging [its] relationship with certain key people and local governments."

I know a few savvy folks who are trying to invest in Chinese stocks whose incredible gains over the last year have certainly fattened some pockets. "Security," they say, "has got to be a big play there – it's China! You know, Big Brother and all." Generally, I'd tell them to take a look at England – to London, specifically – where there are more still and video cameras per capita than anywhere else in the world. But the EWU's not sexy to them (perhaps it should be, considering its performance vs the S&P 500 this year). So I ruminate: There are two pure plays currently traded as ADRs on US exchanges that have different takes on security: China Fire & Security Group (CFSG) and China Security & Surveillance Tech (CSR). Perhaps folks are interested in these.

China Fire & Security Group, through its subsidiaries, "engages in the design, development, manufacture, and sale of various fire safety products for the industrial fire safety market." (Yahoo!) They also build equipment that monitors temperatures and other conditions in industrial settings, infrared detectors for the petrochemical industry, and various types of extinguishing systems for the telecom, chemical, construction, and electronics markets. Finally, CFSG retrofits older buildings' suppression systems to bring them up to code.

Ah, yes, the Unknown West. The Wild East? Russia? India? Wait – Pakistan, really? Bahrain and Kuwait? Colombia and Jordan?

In August, Standard & Poor's launched its S&P/IFCG Extended Frontier 150 Index, offering a glimpse of what future investment opportunities would look like for globalists hoping to diversify beyond the current suite of emerging market flavors. Now, with a new Select Frontier Index, anticipation among investors about finally being able to peel away layers of the emerging markets onion has increased about as much as the YTD performance of iShares' FTSE Xinhua China Index (FXI).

As seasoned investors know, there are myriad ways to play downturns, including holding defensive equities, establishing short plays, buying bonds, or mattress-stuffing.

But what of another play – the R^2 (correlation) play? Do investments in offerings with low historical correlations to the market – represented by, say, Vanguard's total market index ETF (VTI) or Lehman's Aggregate Bond Index (AGG) – prove useful when phrases including "sub-prime," "write-downs", and "missed expectations" pop up in your financial media of choice?