The Global Bull Market Alert Strategy Shines in Tough Times

Let’s recall the Global Bull Market Alert strategy you started implementing in mid-January. Because of the global uncertainty, you began to shift your investments into a portfolio that moved more or less independently of global stock markets. That meant a much greater focus on commodities and currencies. That strategy has been paying off. The sharp sell off of global markets notwithstanding, almost all of your positions are in the black.

Your two bets on the soft commodities boom are thriving. The PowerShares DB Agriculture ETF (DBA) is up 18.07% during the past five weeks. And your second bet, the iPath DJ AIG Agriculture TR Sub-Index ETN (JJA), is up 8.47% during the past three weeks. The soft commodities boom is one of the most powerful investment themes of 2008 and you should add to your positions on any pullback this week.

Your precious metals bets have also paid off. Yamana Gold (AUY) is up 12.65% during the month — with the options up just under 50%. The iShares Silver Trust (SLV) — one share equivalent to 10 ounces of silver — that you bought just two weeks ago is already up 14.10%. Last week’s bet on coal, Market Vectors Coal ETF (KOL), ended the week flat after a big sell off on Friday. But you should be happy to add to these positions at current prices.

Your two currency bets, the CurrencyShares Japanese Yen Trust (FXY) and shorting the Great British Pound through the CurrencyShares British Pound Sterling Trust (FXB), taken together are broadly flat. The weakening dollar makes big gains in these picks more of a challenge than in some of your other commodity-based picks. Both are slow and steady gainers, but they do move independently of global stock markets.

Your short position in China through the UltraShort FTSE/Xinhua China 25 Proshare (FXP) continues to underperform considerably for reasons that I’ve been unable to fathom. The unleveraged iShares FTSE/Xinhua China 25 Index (FXI) is down 12.42% since Nov. 26. A back of the envelope calculation shows that your position in FXP should be up about 25%. Instead, it’s up only 7.58%. This is one position that I would not keep adding.

As our strategy has shown, it is possible to make money on today’s tough markets. And by looking beyond traditional global stock markets, Global Bull Market Alert is proving that “there is always a bull market somewhere.”

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Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.  

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