A Protective Package

02/03/2006 12:00 am EST

Focus:

Martin Weiss

Chairman, Weiss Research, Inc.

One need not be bullish on the overall market to find gains; indeed, Martin Weiss has proven that a bearish outlook can put you in the market's top performing sectors. Here, he offers a package of favorite funds poised to outperform if the US dollar declines.

"If you live in the US, virtually everything you own is probably denominated in dollars—your stocks, bonds, bank accounts, real estate, even insurance policies. But right now, the dollar is falling; and with America’s international finances in shambles, appears vulnerable to a traumatic collapse. So an urgent task for all American investors is to buy protection. Solution: allocate a portion of your money to a diversified portfolio of investments that tend to rise when the dollar falls.

"Three prominent examples:

  • Prudent Global Income Fund (PSAFX), formerly called Prudent Safe Harbor Fund, keeps about 70% of its portfolio in short-term fixed instruments denominated in foreign currencies.
  • Enerplus Resources Fund (ERF NYSE) gives you both a high dividend yield and the potential for substantial capital gains, a rare combination in today’s market. This Canadian royalty trust paid out 36 US cents per unit December 20, and another 36-cent distribution is scheduled for January 20.
  • US Global’s Global Resources Fund (PSPFX) is a high performing fund specialized in precious metals and other natural resources.

"Put the three together and you have a nice, broad range of contra-dollar investments with a stake in foreign currencies, energy, and precious metals. The more the dollar falls, the more you’re likely to make."

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