Before we get started with the details in US News & World Report’s Investing Guide, Ben Stein (actor, speech writer, guru) has some strategies to share with those wondering what to do with their money this year. Here are his thoughts.
Dollar? Dollar? Dollar? The decline of the USD will continue as the United States exports more than the country imports, and there’s no sign of that changing.
The currencies of many emerging-market countries like Taiwan, Korea, and Thailand are also strengthening against the dollar (with the appearance of some immense hiccups in Thailand) as their economies run trade surpluses with the United States… This seems like a sure thing, and in the long run it is. There will be pullbacks and losses along the way, but the long-term picture seems clear: Dollar down, Euros and emerging market currencies up.
Action based on Ben Stein’s advice: Invest in emerging market index mutual funds, specializing in Europe, Australasia, and the Far East.
The price of stocks as measured by the trailing price earnings ratio on the Dow is now above 20. This is very high by historical standards, and sometimes predicts a correction.
I wouldn’t let that stop me from buying. As high as the market is, barring some awful act of terrorism, a natural disaster, or a catastrophic failure of monetary policy, in 20 years it will be much, much higher. You’ll be sorry if you didn’t buy in 2007 — and keep on buying. If the market falls, just keep on buying. When the prices fall is when you get the real bargains.
Here are some more general Ben Stein links for fans:
* Ben Stein remembers President Ford
* Ben Stein rails against options backdating in the New York Times (free registration required).
* Ben asks us to pray for peace.
Updated June 17, 2014 and originally published January 9, 2007.
{ 4 comments… read them below or add one }
Not that I consider myself at all to be in his league, but it’s just freaky that Stein and I own the same stuff: EEM, EFA, IWN, VTI. The only ETF mentioned in that article that I no longer own is ICF, which I held briefly in 2006 and decided to sell at 102 after George (of FatPitchFinancials) suggested I look closer at its valuation, and I realized I didn’t understand REITs enough to be involved.
Anyway, thanks for the link to Stein’s article. At any rate, he can certainly justify buying those ETFs better than I can. Mine is really more opportunistic buying.
I have to agree with all the choices as well. The ETF’s he mentioned are a pretty good way to diversify throughout the world. I own VTI and will start adding more emerging markets.
Actually, if the United States ACTUALLY exported more than the country imports, the dollar would be doing just fine.
Would you still buy these EEM, EFA, IWN, VTI, ICX? If you think the macros factors are positive and say sure – even now they are good buys, you think the risk is low. That being the case, would you agree options on these ETFs would be the way to go? Note: they are all way above (20%) their 200 trailing day averages…