Your Portfolio Is 10 for 11 as Global Markets Rally

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Global markets rallied sharply over the past two weeks, as they often do during this time of the year. All but two of your current positions hit 52-week highs. Many of your positions paid out dividends over the past two weeks as well, which also boosted your returns.

Your gains in Freeport-McMoRan Copper & Gold, Inc. (FCX) are now close to 70%, and you have 30%-plus gains in the iShares MSCI Taiwan Index (EWT) and the iShares MSCI South Korea Index (EWY). Note that I have raised your stops in all three of these positions.

All but one of your positions in your Global Stock Investor portfolio is showing a profit, with eight of your current positions showing gains of 20% or more.

We booked a profit of 29.34% on Dec. 23 when we stopped out of Market Vectors Brazil Small-Cap ETF (BRF). The position had fallen below its 50-day moving average, after Brazil was one of the world’s hottest stock markets for much of 2010.

I have been pleasantly surprised by the strength of global markets, even accounting for their seasonal strength. That said, I cannot ignore the fact that high levels of optimism in global financial markets often are followed by sharp sell-offs. Most technical indicators show that the S&P 500 is overbought in the short term, and even is rolling over.

That does not make me pessimistic over the long term. It’s just a reminder to prepare yourself that when a pullback happens, you can expect it to be even sharper in global markets.

From a risk-management standpoint, our overall investment strategy remains the same. If a position has fallen below its 50-day moving average, I am moving it to (or keeping it at) a HOLD. If a position rises back through its 50-day moving average, then I have moved it back to a BUY.

Technically, all of your remaining positions are BUYs except for Claymore/BNY Mellon Frontier Markets (FRN).

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Finally, I will be having a special private meeting for my subscribers during the World MoneyShow in Orlando, Fla., on Friday, Feb. 11, at 11 a.m., in the Destin Room of the Gaylord Palms Hotel. If you would like to attend, please click here to sign up. I look forward to seeing you there.

Portfolio Update

The WisdomTree Dreyfus Chinese Yuan Fund (CYB) rose 1% at the end of the year. The World Bank issued its first bond denominated in the Chinese yuan, borrowing 500 million yuan ($75.9 million) over two years, showing the increased prominence of the Chinese currency. Back above its 50-day moving average, CYB is a BUY.

iShares MSCI Malaysia Index (EWM) jumped 4.9% and also paid out 24 cents this past week. Malaysian shares have jumped on market volume of more than double the 90-day average on the back of demand from both local and foreign investors, particularly for financial shares. Now firmly above its 50-day moving average, EWM remains a BUY.

iShares MSCI Taiwan Index (EWT) continued its winning ways, rising 4% and paying out a dividend of 29 cents per share. San Diego-based Qualcomm has picked a site in Taiwan to build its new, $975-million manufacturing plant for its new Mirasol display screens. EWT remains a BUY. Raise your stop to $14.00.

iShares MSCI South Korea Index (EWY) rose 5.3% and paid out a dividend of 17 cents, as it closes in on record highs not seen since 2008. EWY remains a BUY. Raise your stop to $56.00.

Freeport-McMoRan Copper & Gold, Inc. (FCX) rose 2.2% as Goldman Sachs has raised its price target on the stock to $132 from $111. A combined play on both copper and gold, FCX remains a BUY. Raise your stop to $95.00.

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Claymore/BNY Mellon Frontier Markets (FRN) rose 0.9% and paid out a dividend of 13 cents. Weakness in Colombia is acting as a drag on this bet on frontier markets. Unable to stay above its 50-day moving average, FRN is a HOLD.

Market Vectors Indonesia ETF (IDX) rose 5.3% and paid out an 83-cent dividend. One of 2010’s top-performing markets, Indonesia has been dragging, but as it managed to eke back above its 50-day moving average, IDX is now back to a cautious BUY.

Las Vegas Sands Corp. (LVS) rose a solid 3.67% as Asia’s gaming sector continues to recover from its correction. On Monday, the Macau reported a 66% surge in gaming revenue in December, and analysts predicted that the region could see a record month in January or February, as analysts raised their target price for LVS to $53.00. LVS is a BUY.

Market Vectors Russia ETF (RSX) rose 4.8% at year end, and paid out a dividend of 18.4 cents. Both the market and the Russian ruble have rebounded over the past two months as oil prices surged 10% and the central bank indicated that it may raise Russia’s key interest rates. RSX is back to a BUY.

Universal Display Corp. (PANL) jumped 3.7% over the past two weeks. If you have a Samsung smartphone, you may have seen Universal Display’s products without realizing it. Samsung phones have a great-looking display and use a lot less energy. PANL remains a BUY.

Vale S.A. (VALE) jumped 3.8%. Brazil’s stocks kicked off 2011 on an enthusiastic note, as investors digested the first signals from the new administration of President Dilma Rousseff. The world’s biggest iron ore producer is a BUY.

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P.S. Don’t miss out on The World MoneyShow Orlando, February 9-12, 2011, at The Gaylord Palms Resort. This event will be your one-stop resource for the education, research and advice that you need to make smart investment decisions in 2011 and beyond. Join me there and hear leading experts reveal where they see growth opportunities in stocks, bonds, ETFs, commodities and options. Click on this link to The World MoneyShow Orlando to register or call 800/970-4355. Be sure to provide priority code 020758!

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