The New Year started with a bang, with most of your positions in your Global Stock Investor portfolio hitting 12-month highs in the last two days of trading. The January effect in global stock markets is well-documented. Going back to 1900, stock markets have ended the month of January up about 63% of the time.
As is typical in bullish phases of the market, your higher-risk positions — Market Vectors Russia ETF (RSX) and the iShares MSCI Turkey Invest Mkt Index (TUR) — have performed the strongest, rising 7.57% and 7.2%, respectively, over the past week. A large number of your positions also paid out dividends in the last week of December, providing a boost to your year-end returns.
Only your commodity-related positions, Freeport-McMoRan Copper & Gold Inc. (FCX) and Market Vectors Gold Miners ETF (GDX), are trading off of their recent highs. Although I am expecting these positions to do well in the coming months, I am moving two underperforming positions, the WisdomTree Dreyfus Chinese Yuan Fund (CYB) and Chemical & Mining Co. of Chile Inc. (SQM), to a HOLD.
Also note that I am tightening your stops on a number of your positions — some with an eye toward exiting them and replacing them with higher octane performers in the coming weeks and months.
Looking ahead to the rest of 2010, I expect to focus a bit more on individual stock picks to balance out the current emphasis of “big picture” themes, based on countries and sectors. Last month’s pick, Brazil’s Vale S.A. (VALE), was the first step in this direction. I also expect to diversify into some commodity and currency themes to complement your current heavy weighting in stocks.
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) stayed flat for the week. Although I do think the revaluation of the yuan is inevitable, I also think there are better opportunities elsewhere, so I now am moving this position to a HOLD.
Claymore/BNY Mellon BRIC ETF (EEB) paid out a dividend of 51.13 cents per ETF on Dec. 24, even as the stock rose a solid 4.52% over the week. EEB remains a BUY. Raise your stop to $41.25.
iShares MSCI Taiwan Index Fund (EWT) hit a high for the year of $13.34 this past week, ending the week 4.5% higher. It also paid out a dividend of 20.8 cents per ETF on Dec. 23. With its high weighting in technology, and Taiwan’s currency hitting a 16-month high last week to boost your U.S. dollar returns, “the Other China” remains a BUY. Raise your stop to $11.80.
SPDR S&P Emerging Markets Small Cap (EWX) closed at a record high of $49.48 yesterday, rising 4.38% on the week. With EWX breaking out of its trading range in an impressive fashion, this leveraged bet on emerging markets remains a BUY. Raise your stop to $43.75.
iShares MSCI South Korea Index Fund (EWY) also closed at a 12-month high of $49.37, after paying out a dividend of 11.4 cents on Dec. 22. With technology and shipbuilding stocks moving steadily higher on fairly strong support, EWY remains a BUY. Raise your stop to $43.00.
Freeport-McMoRan Copper & Gold Inc. (FCX) rose 3.53% last week. Copper was the best-performing metal of 2009, gaining nearly 140% last year. Although it is one of the few positions that are trading off of its 12-month highs, with copper resuming its upward trend, FCX remains a BUY. Raise your stop to $72.00.
Market Vectors Gold Miners ETF (GDX) rose 3.74% this past week and paid out a dividend of 11.1 cents per share on Dec. 23. Gold remains a huge bet on the part of some of the most successful hedge funds out there, as they continue to bet on global “re-flation.” Still technically oversold, GDX remains a BUY.
Market Vectors Indonesia ETF (IDX) resumed its upward trend, rising 6% last week, and hitting a record high of $66.24. It also paid out a dividend of 18 cents on Dec. 22. With the “new BRIC” breaking out to the upside, IDX remains a BUY. Raise your stop to $56.50.
Market Vectors Russia ETF (RSX) rose 7.57% this past week, hitting a high of $33.26. It also paid out a dividend of 7.9 cents on Dec. 23. With Russia tending to outperform global markets on the upside, RSX remains a BUY. Raise your stop to $29.00.
SPDR Dow Jones Intl Real Estate (RWX) rose 3.86% this past week, and is flirting with 12-month highs. Because of its relative weakness, I am keeping this play on the global real estate recovery at a HOLD. Raise your stop to $33.75.
iShares MSCI Turkey Invest Mkt Index (TUR) jumped 7.2% this past week as Turkey raised $2 billion through a 30-year bond offer Tuesday with a yield of 6.85%, in the first major sovereign bond issue from the developing world in 2010. It also paid out a dividend of 26.1 cents on Dec. 22. TUR is a BUY.
Chemical & Mining Co. of Chile Inc. (SQM) rose 2.5% this past week, although it does not seem to have the momentum to genuinely participate in the global equity rally, even under the best of conditions. I am moving SQM to a HOLD. Raise your stop to $36.50.
Vale S.A. (VALE) jumped 6.3% this past week and is trading at 12-month highs. Rio de Janeiro-based Vale will continue to rise after Brazil’s foreign trade bureau showed a 10% month-over-month climb in iron-ore export volumes in December. This Brazilian commodity play is a BUY. Raise your stop to $26.50.
P.S. With the help of global financial stimulus, a number of global markets have rallied from their lows of 2008, providing investors who were invested in the right markets at the right time with healthy returns. Although the question remains — how do you become one of those investors? For an answer, I encourage you to attend The World MoneyShow in Orlando, February 3-6, 2010, at The Gaylord Palms Hotel and Convention Center, to hear more than 60 leading experts. They will be on hand to provide you with insights and recommendations to help you identify emerging opportunities around the globe. I hope that you will join me there! Visit The World MoneyShow Orlando to register FREE today!
P.P.S. To keep up with my most recent views on global markets, sign up on Twitter on @NickVardy.