Three ETFs You Should Buy Today!
Market Update: 2008.06.13
Happy Friday the 13th!
Remember what I said back on January 8, 2008?
“I think we are probably entering a bear market, so don’t count on any stellar returns in the market anytime soon. But that is not to say there won’t be opportunities to take on some good, long-term stock positions in 2008. As a matter of fact, this year will likely be one of the best opportunities to buy stocks that we have seen since 2002. Remember, you don’t get rich buying high, you get rich buying low. Stocks go down, you buy. It is that simple (assuming you are buying the right thing). Don’t buy all at once. Don’t buy just anything. But do steadily accumulate positions in sectors that have great long term potential as they fall. Once things do perk back up, you can make a great return on sound investments.”
So far my 2008 forecast is right on track. I have been on a spending spree during the first half of this year! And the sectors that I have been promoting are still down, and in the case of banks and China, now at new lows. Awesome!
If you haven’t already started buying into my top picks from this January, you better hurry up and start staking your claim in these big gains I am going to make over the next 2-10 years from these beaten down sectors.
1) KBE Banking Index ETF (at a new low today, banks are now down 50%!)
2) ITB Homebuilders ETF (after rallying 70% from my last newsletter, ITB has given up most of that gain and is now in the process of testing its January low. Now down over 70% from their record highs in 2005, homebuilders are about completely dogged out, and I don’t expect ITB to fall much below, if any, its January low.)
3) FXI China ETF (I was right on in October 2007 when I declared Chinese stocks were too high and would fall. As of last night, the Shanghai Composite Index has fallen to under 2900. To put that in perspective, when I sent my newsletter out in October 2007, Chinese shares were all the rage in expert circles and the Shanghai Composite Index was over 6000! Wow, I hit that nail right on the head, and pretty much no one agreed with me at the time. Now that China’s market is down over 50%, it is time to start buying back in. That is what I am doing, are you?)
Remember, all three of these ETFs are in the throes of a severe bear market. I think all three will bottom within the next 6-12 months. ITB is likely near its bottom now. If you want to buy into these future jewels, accumulate shares by breaking your purchases into at least three days (i.e., buy 1/3 today, another 1/3 later, and the final 1/3 a few months after that). This way, you will get a good price now, but may get an even better deal later if they fall further. I don’t know where the exact bottoms will be, but from this level, every additional 10% drop (from current price) that these ETFs fall I would definitely buy more. Accumulate these three ETFs over the next 6 months or so, and you will do just fine in the next 2-10 years. Just be willing to take some loses in the short term as they try to make a bottom, and don’t put all your eggs in one basket. I can promise you this….If you don’t buy them now, you will look back at 2008 once these stocks are flying high again and hate yourself for not buying them while they were practically being given away!
By the way, I just bought more KBE about an hour ago, so my money is where my mouth is!
Also, if you want a long term international play, start getting into EWJ (Japan ETF). And to get twice as much as any CD will pay you, buy PFE (Pfizer) which is paying a whopping 7% dividend!
We will know when the exact bottoms in banking, homebuilding and Chinese stocks are later. Until then, happy investing!
Gregory
Happy Friday the 13th!
Remember what I said back on January 8, 2008?
“I think we are probably entering a bear market, so don’t count on any stellar returns in the market anytime soon. But that is not to say there won’t be opportunities to take on some good, long-term stock positions in 2008. As a matter of fact, this year will likely be one of the best opportunities to buy stocks that we have seen since 2002. Remember, you don’t get rich buying high, you get rich buying low. Stocks go down, you buy. It is that simple (assuming you are buying the right thing). Don’t buy all at once. Don’t buy just anything. But do steadily accumulate positions in sectors that have great long term potential as they fall. Once things do perk back up, you can make a great return on sound investments.”
So far my 2008 forecast is right on track. I have been on a spending spree during the first half of this year! And the sectors that I have been promoting are still down, and in the case of banks and China, now at new lows. Awesome!
If you haven’t already started buying into my top picks from this January, you better hurry up and start staking your claim in these big gains I am going to make over the next 2-10 years from these beaten down sectors.
1) KBE Banking Index ETF (at a new low today, banks are now down 50%!)
2) ITB Homebuilders ETF (after rallying 70% from my last newsletter, ITB has given up most of that gain and is now in the process of testing its January low. Now down over 70% from their record highs in 2005, homebuilders are about completely dogged out, and I don’t expect ITB to fall much below, if any, its January low.)
3) FXI China ETF (I was right on in October 2007 when I declared Chinese stocks were too high and would fall. As of last night, the Shanghai Composite Index has fallen to under 2900. To put that in perspective, when I sent my newsletter out in October 2007, Chinese shares were all the rage in expert circles and the Shanghai Composite Index was over 6000! Wow, I hit that nail right on the head, and pretty much no one agreed with me at the time. Now that China’s market is down over 50%, it is time to start buying back in. That is what I am doing, are you?)
Remember, all three of these ETFs are in the throes of a severe bear market. I think all three will bottom within the next 6-12 months. ITB is likely near its bottom now. If you want to buy into these future jewels, accumulate shares by breaking your purchases into at least three days (i.e., buy 1/3 today, another 1/3 later, and the final 1/3 a few months after that). This way, you will get a good price now, but may get an even better deal later if they fall further. I don’t know where the exact bottoms will be, but from this level, every additional 10% drop (from current price) that these ETFs fall I would definitely buy more. Accumulate these three ETFs over the next 6 months or so, and you will do just fine in the next 2-10 years. Just be willing to take some loses in the short term as they try to make a bottom, and don’t put all your eggs in one basket. I can promise you this….If you don’t buy them now, you will look back at 2008 once these stocks are flying high again and hate yourself for not buying them while they were practically being given away!
By the way, I just bought more KBE about an hour ago, so my money is where my mouth is!
Also, if you want a long term international play, start getting into EWJ (Japan ETF). And to get twice as much as any CD will pay you, buy PFE (Pfizer) which is paying a whopping 7% dividend!
We will know when the exact bottoms in banking, homebuilding and Chinese stocks are later. Until then, happy investing!
Gregory
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