With the recent announcement of unexpected job losses during August, and now the lowering of interest rates, the question about a slowing economy in 2008 has been moved again to the front pages. At this time this is only speculation, however, you may be interested in knowing which investment orientations might have the best potential during times of a slowdown.
Obviously, interest rate sensitive instruments have always worked well, but what else? In my view, it’s way too early to tell specifics; however, as a regular reader of my weekly StatSheet, you will know first as to when new opportunities develop.
As the economy works itself through this cycle and into a different one, you will notice how the M-Index rankings of my listed no load funds and ETFs are changing. While it is possible that we may very well have sell signals in domestic and international funds, the wide variety of sectors will offer investment opportunities for a different economic environment.
As I mentioned before, the glut of ETFs and their ongoing dissection into many sectors will eventually be a benefit to all of us, since there will always be areas in demand even in a slumping economy. My data base currently contains over 1,700 no load funds and ETFs, with more being added.
As time goes on, follow the changes in the rankings, which will give you a clue as to which investment orientations are on the way up and which ones are on the way down.