U.S. Economy Forecast: What You Need to Know in 2010

U.S. Economy Forecast: What You Need to Know in 2010

USEconomy2010Outlook_MMECO12092.pdf

How to Make Money in 2010

Overall, the economy appears to be on the path to progress…. But that path looks like a long one.

In the mean time, look outside the U.S. stock market – to commodities and foreign markets.

Money Morning Contributing Editor Peter Krauth thinks spectacular gains are in store for gold and

silver stocks. Consider the SPDR Gold Trust (NYSE: GLD). Each Share of GLD represents 1/10th of an

ounce of gold. It’s highly liquid, and provides you with the quickest and easiest way to get exposure

to gold.

Investing in silver could be an even better option: The metal is currently trading at less than 15%

of its 1980 high, the equivalent of $130 per ounce. The iShares Silver Trust ETF (NYSE: SLV) is the

best way to play silver directly.

Outside of commodities, consider investing in non-U.S. companies. Money Morning’s Fitz-Gerald

thinks opportunities abound in China. “Eventually, all roads will lead to China,” he says.

Investors might want to consider the U.S. Investors China Region Fund (MUTF: USCOX). The

fund focuses on enterprises registered and operating in China and the China region. At least 80% of

the fund’s assets are invested in equity securities and depository receipts of companies located in the

China region. The fund also invests in securities that trade directly on the Hong Kong, Shenzhen, and

Shanghai stock exchanges, as well as the Taiwan, Korea, Singapore, Malaysia and Indonesia stock

exchanges. The fund is up more than 37% year to date, and annualized five year returns have

averaged 10.5%.

Another hot market for 2010 is South Korea. As Money Morning Contributing Editor Martin

Hutchinson says, “Korea’s true investment allure: The country is well run.” Consider the iShares

South Korea ETF (AMEX: EWY), which invests in the Morgan Stanley Capital International Korea

Index. It has a P/E ratio of 13, but a yield after expenses of only 0.8%. Or, look at Posco (NYSE ADR:

PKX), Korea’s largest steel company. Posco is the world’s No. 3 steelmaker, and is the most efficient

in terms of output/man hour.

USEconomy2010Outlook_MMECO12092.pdf

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