Monday, July 27, 2009

Best way to invest money

How to invest your money... best way for your investment... how to invest in the stock markets... invest in gold... invest in oil... invest in real estate...

I think those are the questions which most of us currently asking ourself. I would stay with equity markets and their latest development. I was waiting for confirmation of technical pattern Head and Shoulders for Dow Jones Industrial Average and it has been crossed above. Also level of 9000 could be called as a magic resistance/support level as shown at the chart below. We saw several retest especially as a resistance.

Another broad US indexes (S&P 500, Nasdaq Composite) are also very close to support and I don't have doubts that we will see crossover in coming days. This should technically support the rally. But from the economic point of view there are still only few "green shots " of recovery. And therefore in mid-term horizon I expect more choppy development rather than stable uptrend.

Another area of equity markets are emerging stock markets. Here I see big potential in China and especially India which is still traded with 40% discount compared the valuation 2 years ago.

For commodity investing I would put my money into Natural Gas futures or any kind of fund underlying Henry Hub contracts. Someone can say energy goes in line with equity trends and therefore there is no diversification. But that is not the case of Natural Gas nowadays. It is more or less valid for crude oil price. Historically ratio crude oil / natural gas makes value of ten. Right now we are somewhere around 17.


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