No doubt you have been reading the negative news on the economy. How can you not, it’s everywhere!

We just witnessed a slowdown in economic growth, and recently we saw second-quarter GDP revised downward. No doubt you have seen the downbeat news on the housing front, as overall sales and home prices are ounce again headed south. No doubt you’ve been talking to friends who are worried about the falling value of their stock portfolios, and about the direction our country is headed. And there is likely no doubt that you have your own concerns about what to do with your investment nest egg.

Well, I have good news for you! In my opinion, the world is NOT coming to an end. America will not slip back into a recession anytime soon, and a big Congressional victory by conservatives in November could set us up for a fantastic buying opportunity—if you know where to invest your money.

Throughout most of this year, I have been warning investors about the risks of owning mutual funds and about the mindless strategy of buy and hold that most stockbrokers and advisors constantly advocate. Throughout most of 2010, the best strategy has been a high cash position combined with a healthy dose of patience. Now, however, my research is pointing to opportunity.

Taking advantage of this opportunity is easy. All you have to do is join me for an informative teleseminar on Saturday, September 11, at 12:00 p.m. Pacific Time. I’m calling this seminar “The Next Big Opportunity: High Yield.”

As the title suggests, we believe there is a HUGE opportunity coming for investors seeking high-yield investments. High-yield investing comes with its own set of risks and rewards, and we’ll be focusing on these risks and rewards in this teleseminar. If you’re an investor who wants to increase the income generated from your assets, then you’ll want to join me on Saturday, September 11, at noon Pacific Time.

During this one-hour teleseminar, I will share with you these key points:

• How to build a high-yield portfolio fit for these chaotic economic times
• Which high-yield securities are appropriate for your portfolio
• How you can plan for, and protect yourself from, the bubble now forming in bonds
• How stocks are likely to perform in a slow-growth economy

In addition, you’ll also receive my complete High-Yield Watch List.

Our previous teleseminars have been very popular with radio show listeners, newsletter subscribers and Fabian Wealth Strategies clients. For this seminar we have room for just 800 attendees. This event is absolutely FREE if you attend on Saturday, September 11, at 12 p.m. Pacific Time. There will be a nominal change for listening to the replay of this event, so make sure you register for the live event by right now by clicking here.

News coming out of Europe has been pretty bleak this year, to say the least. As if Greece’s debt woes weren’t bad enough, dismal news from Ireland, Portugal and Spain (the so-called PIGS) further complicate Europe’s debt mess. Fortunately, good news emerged from the euro-zone in the form of second-quarter reports that indicated stronger-than-expected gross domestic product (GDP) growth.

Germany may be the country in Europe where the economic news is the most encouraging. The country notched an unexpected surge in GDP that helped to give a much-needed boost to the struggling eurozone. With Germany serving as the economic engine, the combined second-quarter 2010 GDP of the 16 countries that use the euro jumped an average of 1%, compared to the first quarter of 2010, and 1.7% versus the second quarter of 2009. The gains mark the fastest economic growth for the eurozone in four years.

One way to take advantage of the economic gains in Germany is to invest in the iShares MSCI Germany Index Fund (EWG). This fund seeks to provide investment results that correspond to the price and yield performance, before fees and expenses, of the publicly traded securities in the German market, as measured by the MSCI Germany Index. The index itself seeks to measure the results of the German equity market. It is a capitalization-weighted index that aims to capture 85% of the publicly available market capitalization. When market conditions improve, EWG likely will benefit nicely due to Germany’s economic gains.

In addition, the fund is well diversified through its holdings in a wide array of companies and sectors. Its top ten corporate holdings, as of July 30, are: Siemens AG-REG, 10.62%; E On AG, 7.11%; BASF SE, 7.1%; Allianz SE-REG, 7.02%; Daimler AG, 6.43%; Bayer AG, 6.29%; Deutsche Bank AG-REG, 5.11%; Deutsche Telekom AG-REG, 5.07%; SAP AG, 4.5%; and RWE AG, 3.89%. EWG’s five biggest sector holdings, also as of July 30, are: financials, 19.36%; industrials, 15.63%; consumer discretionary, 14.83%; materials, 13.66%; and utilities, 11.31%.

Rising GDP growth, consumer confidence and business confidence in Germany are upbeat signs. Increased demand from around the world for German products helped its economy to grow 2.2% in the second quarter — marking the fastest quarterly rate since the country’s reunification in 1990. That growth rate beat expectations by almost an entire percentage point.

One concern is whether Germany’s current economic growth is sustainable. Certain economists think that Germany’s economy has been fueled by temporary factors such as a rebound in construction. Although construction gains may continue through year-end 2010, they may fade a bit in 2011.

What’s past is often prologue, and this Shakespearean phrase (from “The Tempest” for my fellow literary cohorts) certainly applies to financial markets. So when assessing the market’s future, it often helps to look through the lens of historical precedent.

One way to do this is to take note of key times in the political cycle to see when, generally, markets have reacted most favorably. When I did this recently a clear correlation practically jumped up and bit me in the nose.

I found that during the first and/or second year after a presidential election, markets are most apt to make notable corrections, and according to the Stock Traders Almanac, “In the last eleven midterm election years, bear markets began or were in progress nine times.”

Interestingly, the data states that, “Since 1914 the Dow has gained 50% on average from its midterm election year low to its subsequent high in the following pre-election year.” This is the key statistic for us, as we now are very close to the midterm election year low.

I suspect that when we look back on 2010, we’ll view the current climate as an outstanding buying opportunity. In fact, if historical election cycle market data is any harbinger of the future, then 2011 could be one of the best years for stocks in a long time.

Seeking new frontiers with your investment portfolio? Then why not take a trip to a select group of emerging markets offering refuge from the recent slide in most global markets? It may surprise you, but stock markets in places such as Chile and Colombia actually are red hot.

One way to invest in these emerging markets and to gain diversification at the same time is to buy an exchange-traded fund (ETF) that gives you exposure to a variety of countries through a single purchase. One such fund is the Claymore/Mellon Frontier Markets ETF (FRN). This fund seeks investment results that correspond generally to the performance, before fees and expenses, of an equity index called The Bank of New York Mellon New Frontier DR Index.

This ETF normally invests at least 80% of its total assets in American depositary receipts (ADRs) and global depositary receipts (GDRs) that comprise the index. The fund also seeks to invest at least 80% of its total assets in securities of issuers from so-called Frontier Market countries. Using a low-cost indexing investment approach, the ETF tries to replicate the performance of the Frontier Index, which consists of countries that are chosen based on an evaluation of their gross domestic product growth, per capita income growth, past and expected inflation rates, privatization of infrastructure and social inequalities.

The Claymore/Mellon Frontier Markets ETF is not as diversified as many international ETFs, so just be aware that it plays clear favorites among the countries and sectors that it tracks. The geographic weightings of the fund are somewhat concentrated on three countries: Chile, 31.31%; Egypt, 14.51%; and Colombia, 12.33% (as of June 30).

Those likely are not the countries where you or most investment advisers usually focus, but for that reason they offer a way to avoid moving in lock-step with other markets around the world. Such non-correlation is a good approach to reduce the risk in your investment portfolio. The fund’s sector concentration is led by financials, with 39.87%; utilities, 14.01%; energy, 13.67%; telecommunications services, 10.53%; and materials, 9.54% (also as of June 30).

Our latest high yield special report focuses on a dozen stocks and funds that are currently yielding more than 6% annually. We have broken these funds down into three high yield investment categories and included detailed descriptions about each one. In these uncertain economic times we are committed to providing investors independent, thorough and current information which can enhance their investing success.

We have carefully selected these funds as potential investment opportunities, however we urge you to do your own research and analysis to determine if they are suitable for your portfolio. At Fabian Wealth Strategies we take portfolio management very seriously. We specialize in actively managing income and growth oriented portfolios for our clients. In addition, we build strong relationships based on personal attention and service.

If you have any questions about the assets you own or strategies to increase your high yield exposure, call us right away at 800-391-1118 to schedule a free portfolio analysis.

Click here to download this special report.

Over the course of the last several years, I’ve been telling you about the threat that deflation (as opposed to inflation) may pose to your serious money. Well, it seems as though now I am not the only money manager concerned with the threat of inflation.

According to an article in The Wall Street Journal aptly titled, “Big Investors Fear Deflation,” many prominent investors now are becoming concerned over the prospect of deflation and how it could take a bite out of investor wealth. The article specifically calls out PIMCO bond-fund manager Bill Gross, investment manager Jeremy Grantham and hedge-fund managers David Tepper and Alan Fournier as among the best-known investors preparing for a potential deflationary wave.

The article also points out that these investors are growing increasingly concerned that relatively weak economic data, along with a general consensus that global policy makers are unable to take further steps to stimulate their respective economies, will bring about a new deflationary future.

“Deflation isn’t just a topic of intellectual curiosity, it’s happening,” Bill Gross told The Wall Street Journal. I respect Mr. Gross’ opinion on just about every economic issue, even when I don’t agree with him. On the deflation issue, however, I find myself unable to object to his logic. That logic includes the citing of an annualized 0.1% decline over the past two years in the U.S. consumer-price index. This kind of aggregate price decline may not seem like much, but as Gross points out, “It’s an uncertain world that’s tipping toward deflation.”

Now, you may remember that after the 2008 financial crisis, many people feared a deflationary spiral would take hold of the global economy. That didn’t happen, of course, and part of the reason why is because governments around the globe infused the financial system with hordes of new capital. But like these investors in the article point out, how long are governments going to be able to prop up their respective economies before the whole house of cards come crashing down?

Before we go any further, I must say that I do not think we are on the precipice of disaster or on the verge of a deflationary meltdown in the global economy. If I truly thought that, then I wouldn’t own any stocks in any of my investment advisory services.

What I am saying is that there is a growing chorus of some very smart minds out there that have now become aware that deflation is no pie-in-the-sky abstraction or fear-mongering rant designed to scare you into a bunker. Rather, deflation is a potentially dangerous scenario, not just for global policymakers but for anyone who is trying to manage their serious money.

I know I am going to continue monitoring economic conditions so that I can identify any warning signs of a pending deflationary wave.

Bullish market signals, combined with a weakening economy, complicate investing decisions; however, I do have an exchange-traded fund (ETF) that you may want to consider. This fund tracks companies that have consumer products that people need in both good and bad economic times. It’s the Consumer Staples Select Sector SPDR (XLP).

Companies in the consumer staples sector primarily are involved in the development and production of consumer products that cover food and drug retailing, beverages, food products, tobacco, household products and personal products. The fund’s top ten holdings, as of August 3, were: Procter & Gamble (PG), 15.53%; Wal-Mart Stores (WMT), 9.58%; Philip Morris (PM), 8.69%; Coca-Cola Co. (KO), 6.85%; PepsiCo (PEP), 4.79%; Kraft Foods (KFT), 4.59%; CVS Caremark (CVS), 4.23%; Altria Group (MO), 4.14%; Colgate-Palmolive (CL), 3.76%; and Walgreen Co. (WAG), 2.68%. These are the best known and most well-established consumer products companies in the world.

Unlike high-flying growth stocks that might make you feel like you’re on a roller-coaster ride, XLP tracks companies that tend to provide investors with fairly stable returns. The large size of the companies tracked by XLP does limit the prospects of the fund surging in value when the market turns bullish. However, the companies also should hold their share-prices reasonably well during a market pullback.

The old adage of investing in companies that sell products that people want and need fits this fund perfectly. You typically will continue to use soap, shampoo and toothpaste, regardless of economic conditions. Likewise, you’ll continue to eat and drink to ensure you survive until better times are here.

In sum, XLP is a fairly conservative equity investment that gives you the chance for capital appreciation, but it’s one that is less prone to big drops than most other stock funds. If you like excitement, XLP may not give it to you. But if you want to stay invested in equities and still sleep at night, XLP may be just what you are looking for right now.

It’s summer, and the weather is heating up all across America.  To cool off, many people will pour themselves a tall glass of ice-cold lemonade.  Hey, I think it’s fine if your lemons get squeezed into lemonade, but what isn’t fine is if you have lemons in your investment portfolio.

The lemons I’m talking about here are underperforming mutual funds, funds that have earned a spot on the infamous Mutual Fund Lemon List, the list of the worst-performing mutual funds.  To be classified as a lemon, the fund must pass strict screening criteria: it must underperform its peer group average for the last 12 months, as well as for the last three and five year periods.

This quarter’s Lemon List includes 1,584 mutual funds totaling $715 billion in assets, and if one of the funds you own is on the list, you need to squeeze that lemon from your holdings.

To see the latest edition of the Lemon List, and to get your FREE update each quarter, just go to the Mutual Fund Lemon List website today.

Hey, all you have to lose is that sour taste in your portfolio.

Even though equities have been retreating in much of the world, there are markets in Asia that have fared well so far in 2010. Not only have I noticed the trend, but I have my eye on several country-specific exchange-traded funds (ETFs) in that region. This ETF Talk is the second of a three-part series that will focus on one of those Asian funds each week in the Making Money Alert.

Thailand is on my radar screen as a profitable market, particularly when so many others have pulled back this year. That’s why I am looking at the iShares MSCI Thailand Investable Market Index Fund (THD).  I like to use ETFs to invest in a specific country’s stock market to gain the advantages of diversification, reduced risk and low fees.  In the case of THD, this is an ETF that offers such an opportunity by seeking investment results that correspond to the price and yield performance, before fees and expenses, of the MSCI Thailand Investable Market Index. The index seeks to match the performance of the Thai equity market.

The fund is up 12.16% so far this year, an especially impressive performance when you consider that the Dow Jones Industrial Average has fallen 1.92% during the same time span. A key reason is that Thailand’s economy is growing much faster than in most other places around the world.

Indeed, Thailand’s Finance Ministry raised its 2010 forecast for economic growth to between 5% and 6% in June to mark the second such upward revision in the past three months. The government had projected 2010 gross domestic product growth of 4% last December and 5% during March. Rarely are any countries these days projecting increased economic growth but Thailand clearly is a most welcome exception. To keep the economy growing, the nation’s central bank has held interest rates at 1.25%, its lowest level since July 2004.

Thailand’s economic recovery is notable, since other countries, such as the United States, have pursued low interest-rate policies to spur economic growth but have failed to achieve the same results. Thailand is Southeast Asia’s largest economy — second only to Indonesia — and its economy expanded 12% during Q1, 2010 from the same quarter in 2009. Increased exports largely fueled the nation’s Q1 economic growth. To that end, the government raised its 2010 export growth forecast in late June to 22.5%, up from the 18% that it had projected in March.

Another plus is that Thailand’s economic freedom score of 64.1 is 1.1 points better than last year, as the country improved in five of the 10 categories used by the Heritage Foundation to assess economic freedom. Areas of improvement include freedom from corruption and investment freedom. Thailand’s economic freedom score ranked 10th out of 41 countries in the Asia–Pacific region, and its score is higher than the world and regional averages.

Although Thailand has endured political unrest, it boasts one of the world’s top equity performances so far this year.

Earlier today, President Obama signed into law the Dodd-Frank financial overhaul bill. The new law, commonly known as FinReg, is designed to protect the public from financial malfeasance on the part of financial institutions. Ostensibly, the bill deals with macro concepts such as “systemic risk” and “too big to fail.” Yet I am willing to bet that most investors don’t think the new FinReg will affect their portfolios in any substantive way.

Yet as a brilliant article in today’s Wall Street Journal points out, if you thought FinReg has no bearing on your money, then think again.

In this most-excellent piece, written by reporter Eleanor Laise, you’ll find details on the myriad ways the new regulations could affect your investment accounts. Some of the ways the new legislation affects investors is positive, and others are negative.

For example, the legislation could make brokers more accountable to their clients, which is a good thing. However, the new FinRegs may put the kybosh on many financial instruments commonly found in 401(k)s, hedge funds and even regular margin accounts that are used at nearly every brokerage.

The bottom line here is that if you thought FinReg was solely about keeping tighter reins on the big financial horses, then you had better reevaluate that assessment. Even you, the little investor pony, will feel the reverberations from the nearly 800-pages of new regulations.

I strongly recommend you read this article, as it goes into great detail about just how extensive these new regulations really are.

For my radio show and newsletter readers I have posted the latest edition of the Fabian ETF Report.

Armed with this extensive information on virtually the entire ETF universe, you’ll be able to glean a really sharp picture of what sectors, countries and types of ETFs are currently outperforming their peers. Perusing this extensive list of ETFs should give you a real sense of what’s happening—not only in the domestic market, but all over the globe. The data is as of June 30, 2010.

Please enter your information below to download this valuable resource.

Join me Saturday, July 10, at 12:00 p.m. (noon) Pacific Standard Time, for a FREE discussion of the rapidly changing 2010 financial markets. In this teleseminar, “Mid-Year Review and Market Outlook,” I will be speaking about how you should position your portfolio for what promises to be a tumultuous second half of 2010.

As you’ve likely noticed, things are not going well with the stock market. We saw stocks fall below their long-term moving average in May, an event that hasn’t happened since January 2008. The major indices now are firmly in negative territory for the year, and many investors are looking for new safety-first strategies to protect their wealth.

During this one-hour teleseminar, I will share with you these key points:

• A recap of the financial markets in the first half of 2010. What’s worked, and what hasn’t.
• How to read the price trends in the markets, and what they’re telling us.
• What investment themes I believe represent the best opportunities in the second half of 2010.
• A glimpse of my ETF watch list for the rest of the year.
• Most importantly – how to evaluate your current investment positions so that you don’t get hurt again.

All teleseminar registered participants will receive a valuable handout ahead of time outlining the key topics. To join me for this timely discussion on Saturday, July 10, please register today and make sure you reserve your place. This FREE, one-hour teleseminar will be limited to the first 800 registrants. Judging by our last three record-setting teleseminars, we will reach capacity quickly. Take advantage of this opportunity and reserve your spot today!

Sincerely,

Doug Fabian, President

Fabian Wealth Strategies

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Fabian Wealth Strategies, Inc. is a registered investment advisor with the U.S. Securities and Exchange Commission. Doug Fabian is a registered investment advisor representative. The information expressed in this seminar is for educational purposes only and should not be construed as a recommendation to buy, sell, or hold any specific security. Consider the risks, fees, and expenses before making any change to your investment portfolio.

On May 6, the market experienced something it really never has seen before. The huge “flash crash” that caused the Dow to swing more than 1,000 points in a little more than an hour represented the second-largest, one-day point decline (998.5 points) on an intraday basis in Dow Jones Industrial Average history.

There’s been a lot of speculation about what actually caused the flash crash and, to this day, nobody really knows for sure. I’ve heard all kinds of potential explanations, some more plausible than others. There was the so-called “fat finger” scenario, where it is said that traders in Procter & Gamble inadvertently placed a big sell order that caused the program trades to be triggered. This notion was later proven to be false.

Then we saw a report by the Securities and Exchange Commission that said the flash crash was caused by a confluence of economic events, market forces and trading-system functionality that led to a significant dislocation of liquidity. I think that conclusion is pretty obvious and less than insightful, to say the least. Other reports blame so-called high-frequency trading programs for the huge imbalance in trades. In my opinion, this is the most plausible culprit.

Unfortunately, a lot of people are blaming ETFs for the problems of the flash crash, and this is akin to blaming the victim for a criminal’s actions. Yes, it is true that many ETFs suffered from trading glitches and broken trades, but these were essentially the same problems that rocked individual stocks.

According to a report by Morningstar, about 20% of all ETFs were at least temporarily snarled in the trading glitches that took place that day. At some point on May 6, approximately 210 of the 980 funds in the ETF universe changed hands at prices more than 50% below their ultimate closing price, according to Morningstar. And while this is indeed a big problem, it is more of a market problem than an ETF-specific issue.

I think that the flash crash should be looked upon as a systemic problem with program and high-frequency trading, and not a problem with the trading vehicles at hand. You could say the market suffered a mild heart attack on May 6, and rather than trying to get at the root cause of the problem, some pundits would rather blame the victim, which in this case are ETFs and individual stocks.

I say it’s time to look at the high-frequency trading programs and perhaps other computerized trading programs — not the financial instruments being traded — for the real cause of the flash crash.

I recently read an article in The Wall Street Journal that proffered the theory that there are seven reasons why investors shouldn’t dump international equity funds. Some of the key points in the article are that the euro has already fallen way off its highs, and therefore cannot go down much more. The piece also argues that Europe will maintain its common currency, and that a weaker euro will bolster exports, which is good for European-based companies.

I think there is one huge reason why you should dump these funds, and that is the Fabian Plan recently issued an international equity sell signal. But I thought that I would reply to this article directly, and address some of the common misperceptions about why things are going to be okay with international equities going forward. So, here are my seven reasons why you should dump your international equity funds.

Reason 1) The U.S. dollar is in a strong uptrend vs. the euro and other rival currencies. If the euro continues flailing, the flight of capital out of the eurozone will continue pounding stocks, and by extension your international equity funds.

Reason 2) Europe is cutting spending, and her economies are floundering in a no-growth soup of their own making. One reason why stocks in Europe are falling is due to a coming recession precipitated by the painful debt situation in Greece, Portugal and Spain. Simply put, the age of austerity is coming to all of Europe.

Reason 3) Europe has a huge debt problem. They have too many social programs, and they’ve made too many fiscal promises. Somewhere in Europe there is going to be a massive debt default, and/or the servicing of existing debt will become such a burden that economic growth becomes virtually non-existent.

Reason 4) Mutual fund managers stay fully invested in down markets (they have to by charter), and that means they cannot manage risk. This holds true for international fund managers, who are essentially obligated to go down with the ship regardless of market conditions.

Reason 5) Nearly every major broad-based international mutual fund now trades well below its respective long-term moving average. The Dow Jones World Stock Index also trades below its 200-day moving average, meaning that continue risk is high, and a new international bear market is on the precipice of becoming reality.

Reason 6) The slowing in the eurozone nations could begin threatening global economic growth, and it could even cause a double-dip recession. China has already voiced concerns that its largest trading region is slowing rapidly, and this could be the economic “contagion” that many investors and economist fear.

Reason 7) Europe is raising taxes. From Greece to the UK, eurozone governments are trying to raise revenues in order to salvage their social programs and to service their debt. What’s really scary is that Europe could be a proxy for the U.S. in years to come.

These are just my top seven reasons why you should dump international equity funds, but the list is by no means complete. Suffice it to say I am an international equity fund bear right now, so please don’t fall for the rosy proclamations in the financial press.

The worst is yet to come for Europe, and that means there will likely be much more pain in international stocks going forward.

If you’d like to find out more about the Fabian Plan and how it generates buy and sell signals that have beat the market for over three decades, then I invite you to click on my latest presentation.

Two weeks ago I sent you an update on the financial markets concerning the cross of the S&P 500 Index below the 200-day average. This is what’s known as a “sell signal” within the parameters of the Fabian Plan. As a follow-up to that message I have created a brief 10 minute powerpoint presentation that I would like to share with you.

Click here to view this presentation.

I think that you will find this information to be both timely and helpful in managing your portfolio over the rest of 2010. At Fabian Wealth Strategies our number one goal is to help you protect and grow the assets you have worked so to hard to accumulate.

If you would like to meet with me for a free second opinion on your assets, please call our offices at 800-391-1118 to setup a consultation.

Sincerely,

Doug Fabian
President, Fabian Wealth Strategies &
Host, Doug Fabian’s Wealth Strategies Radio Show

To give you a bit more perspective on the Fabian Plan and just how effective it’s been throughout the years, I wanted to show you something we call “Great Moments in Fabian History.” This is a rundown of some of the major events that have unfolded in the financial markets during the past three decades, along with some of the specific advice that served our subscribers exceedingly well.

September 1976: Dick Fabian self-publishes the book, “How To Be Your Own Investment Counselor.” This was the first (and in my opinion, still the best) primer on the trend-following approach that formed the basis for the current Fabian Plan. After experiencing the devastating bear market of 1973-74, Dick knew investors needed a better way to manage their serious money. Dick demonstrated that with a simple, easy-to-understand plan for beating the markets, investors really could build serious wealth with only minimal time and effort expended on their investments.

April 1977: Motivated by the overwhelmingly positive response to his book, Dick teamed up with his wife Marie Fabian to launch the Telephone Switch Newsletter right from their dining room table. The basic purpose of the newsletter was to report and to monitor the results of the buy and sell signals generated by the plan laid out in his book. In his original newsletter, Dick included funds such as Fidelity Magellan and 44 Wall Street. He reported on the prices of these funds and the major market indices for the previous 39 weeks. He also produced charts of these indices by hand.

September 1979: Doug Fabian joined the newsletter as a mutual fund analyst.

July 1981: The Telephone Switch Newsletter issued a bear-market sell signal. The sell followed subscriber profits of 40% during the preceding 14-month buy cycle. The bear market that followed registered a drop of 27% in the Dow Industrials. This plunge was the first bear market that Fabian subscribers would avoid. At that time, money funds were paying a whopping 18% annually — accompanied by a nationwide inflation rate of 20%.

September 1982: Dick issued a new bull market buy call that generated returns of 45% in the next 15 months.

June 1985: A buy signal was issued for the newly created International Plan. This buy signal lasted more than two years and produced gains in excess of 140% in international funds. At that time, the U.S. dollar was in a major bear market that provided a strong tailwind to international investments. This uptrend in international markets ended with the 1987 stock market crash.

October 1987: A sell signal on Oct. 15 warned subscribers to move into the safety of the money funds. Four days later, the market experienced its biggest, single-day decline ever. Fabian followers walked away with gains of 23% in calendar year 1987. The Telephone Switch Newsletter was one of five publications to have predicted the decline, according to news reports of The Wall Street Journal. Of course, we did not predict anything. We simply stuck to our disciplined investment approach and followed the rules of the Fabian Plan.

August 1990: The Fabian Plan issued a new sell signal, as Kuwait was invaded by neighboring Iraq. This geopolitical event instigated a global stock market bear that would end only after an American-led coalition of 80 countries booted Saddam Hussein out of Kuwait. We were only out of the market for three months before issuing a new buy signal that led to a 34% gain during the next 18 months.

January 1995: After a year in which the Federal Reserve raised interest rates four times and when most economists were predicting a recession, the Fabian Plan identified a new uptrend that kicked off a bull market run in the late 1990s. During the next five years, the Fabian Plan produced annual gains of more than 20%, led by the technology stock boom and the proliferation of more than 10,000 mutual funds.

April 2000: The Fabian Plan issued a new sell signal for stocks as the NASDAQ market began to fall. A decline of more then 70% ensued during the next three years.

January 4, 2008: The Fabian Plan issued a new sell signal for stocks well before the bear market selling of 2008 intensified. This call put subscribers into the safety and security of the money market. While most investors tossed and turned at night, subscribers to this service slept like babies.

I could go on and on here, but I think I’ve made our point. You see, the Fabian Plan isn’t some here-today, gone-tomorrow gimmick. The Fabian Plan has worked for longer than many stock brokers out there have been alive. And, with a strong adherence to tradition and a constant attempt to learn from the past, we’re going to continue making great calls for you for another three decades.

Listen to my latest audio special report recorded on Saturday, May 15,2010. In this seminar, Sound Fixed-Income Strategies in an Uncertain World, I outline the conservative fixed-income strategies that I am implementing during this time of unprecedented financial challenges.

No doubt you’ve been following the news of late in Europe. The continent is facing a crisis in terms of its debt, currency and financial stability. The Euro has fallen over 10% so far this year, while short-term interest rates in some countries have risen to over 20%. Countries such as Spain, Greece, and Portugal have all had their credit ratings cut and face debt ridden economies.

I’ve been forecasting for months that the problems in Europe would spill over into U.S. investor portfolios and that is what’s happening right now.

Five key points you’ll learn in this seminar are:

• How does the crisis in Europe affect your stocks and mutual funds and what should you do now?
• What will be the next big move in interest rates and our economy?
• What fixed-income investments should be avoided right now?
• What are the right fixed-income strategies for the current market environment?
• My outlook for the U.S. stock market and equity markets around the world.

Due to the enormous demand for our teleseminar series and the expanded resources required to provide this premium content, the one-time cost to download this one hour audio recording and 6-page handout is $9.95.

To download the seminar please click here.

Please note: The MP3 audio file and PDF of the handout will be immediately available for download after purchasing the content. Links to the files are delivered electronically to you via email. An MP3 or Windows Media Player is required to listen to the audio. Adobe Acrobat Reader is required to open the handout. This content is not affiliated with any of Doug Fabian’s newsletters or trading services.

Join me on Saturday, May 15, at 12:00 p.m. (noon) Pacific Standard Time, for a FREE discussion of the rapidly change financial markets in 2010. In this teleseminar, Sound Fixed-Income Strategies in an Uncertain World, I will be speaking about conservative fixed-income strategies that I am implementing during this time of unprecedented financial challenges.

No doubt you’ve been following the news of late in Europe. The continent is facing a crisis in terms of its debt, currency and financial stability. The Euro has fallen over 10% so far this year, while short-term interest rates in some countries have risen to over 20%. Countries such as Spain, Greece, and Portugal have all had their credit ratings cut and face debt ridden economies.

Trepidation rising: While watching the reports from the media, many investors are thinking…

• How does this affect my investment portfolio?
• What does this mean for the US economy?
• What about our debt problems and lack of confidence in our own government?

I’ve been forecasting for months that the problems in Europe would spill over into U.S. investor portfolios and that is what’s happening right now.

Five key points you’ll learn in this seminar are:

• How does the crisis in Europe affect your stocks and mutual funds and what should you do now?
• What will be the next big move in interest rates and our economy?
• What fixed-income investments should be avoided right now?
• What are the right fixed-income strategies for the current market environment?
• My outlook for the U.S. stock market and equity markets around the world.

All conference call registered participants will receive a valuable handout ahead of time that outlines these key topics. To join me for this timely discussion on May 15th, please register today to reserve your place. This FREE, one-hour teleconference will be limited to the first 800 registered. Judging by our last two record-setting teleconferences, we will reach capacity quickly. Take advantage of this opportunity and reserve your spot today.

In a recent radio show broadcast, I offered my listeners a free special report, The Top 10 Fixed Income ETFs for 2010.

I made this report available for free, because I believe most fixed-income investors are using the wrong investment vehicles to achieve their goals. Many people still are using expensive mutual funds and/or individual bonds to generate a steady income stream, but in my opinion the best tools for generating income are low-cost exchange-traded funds (ETFs).

To help you identify the best income ETFs out there, I decided to compile a watch list—and to make it available to my listeners. Now, I’ve taken this offer one step further and I’m making this top 10 income ETF list available to you, the Alert reader, absolutely free.

Unfortunately, the current low interest rate environment has prompted many fixed-income investors to take on more risk than they should, precisely at the wrong time. Most investors have forgotten that fixed-income investments can and do go down significantly, especially during periods of credit distress.

At Fabian Wealth Strategies, we specialize in actively managing fixed-income exchange-traded fund portfolios for our clients. We build portfolios that deliver monthly yield with the protection of a sell discipline on all positions. In addition, we have the capability to own funds that take advantage of a volatile interest rate environment.

Do you want help to assess your fixed-income portfolio’s current position in the market ahead? If you have any questions about the assets you own or strategies to increase your fixed-income exposure, call us right away at 800-391-1118 to schedule a free portfolio analysis.

This offer is available for goal-oriented investors with more than $250,000 in their investment portfolios. Please be prepared to discuss and/or fax us your latest portfolio statements so we can know exactly what holdings you currently own. We look forward to working with you to achieve success in 2010.

NOTE: Fabian Wealth Strategies is a SEC registered investment adviser.

Airlines and their related exchange-traded funds (ETFs) recently got a boost, as they hit 52-week highs, given lift by the broader market rally. The recent Icelandic volcano eruption kept European flights grounded for a number of major carriers and caused the share prices of those companies to dip. The question is whether airline stocks will continue to fall or whether they might be ready to rise again.

Keep in mind that when the 50-day and 200-day moving averages that I track fall well below current equity prices, stocks typically pull back – just as they did yesterday when the Dow Jones Industrial Average closed at its lowest level since April 7. However, such market retreats offer a chance to profit if you make the right trades.

If you think airlines will recover from the recent market turbulence and fly to new heights, the Claymore/NYSE Arca Airline ETF (FAA) may be the right fund for you. The FAA ETF is designed to mirror the performance of the NYSE Arca Global Airline Index, which tracks the largest and most liquid common stocks and American Depository Receipts (ADRs) of airline companies that are traded on the exchanges in developed markets. The index holds shares in 25 companies from 14 countries, with market capitalizations ranging from $750 million to more than $9 billion.

News of a merger between United (UAUA), Continental (CAL) and U.S. Airways (LCC) has helped fuel anticipation that FAA could be on its way up. Even a merger between United and Continental on their own could mean upside, if the airlines consolidate resources to boost revenues and margins.

I am not currently recommending FAA, but I am watching it closely for key technical signs that could cause me to book a flight on this airline ETF.

First it was Greece, and then it was Portugal, now it’s Spain. Of course, I am talking here about the recent debt downgrades in these three PIIGS nations. PIIGS is the market acronym that stands for Portugal, Italy, Ireland, Greece and Spain, and so far three of these five little piggies have been taken out to slaughter by ratings agency Standard & Poor’s.

Today, Standard & Poor’s downgraded Spain’s long-term credit rating by one notch to double-A. The agency also gave a negative outlook on the EU nation, saying that Spain is likely to experience an extended period of subdued economic growth that will put pressure on the country’s federal budget and its ability to repay debt.

On Tuesday, Greece and Portugal were downgraded two notches each. In the case of Greece, that nation’s debt rating was downgraded to junk status. Portugal isn’t quite as bad as Greece, but that country also is having a woeful time managing its budget in the face of the current economic climate.

The debt problems in Greece, Portugal and Spain aren’t isolated cases, and I suspect we could see a lot more debt downgrades in Europe before this deluge is over. The thing that worries me about this situation is that the spend and borrow policies that pushed these countries into their current predicament are actually being followed to a large degree here in the United States.

We saw what kind of havoc these downgrades wreaked on stocks around the globe in Tuesday’s trade, and just think what could happen to global equities if the United States goes the same way as these three PIIGS nations. I shutter to even think about it, yet my reason forces me to keep this possibility on my list of future threats to investor wealth.

If our government keeps playing the big spend and borrow game for too much longer, we could begin to resemble Greece—without the ouzo, the Mediterranean Sea and the Parthenon.

Last week, we received the news that Wall Street icon Goldman Sachs had come under investigation by the Securities and Exchange Commission (S.E.C.) for allegedly misleading its customers by withholding “vital information” about a synthetic collateralized debt obligation (CDO) named Abacus. The news rocked the market, but in the days following the Friday Goldman sell off, stocks managed to recover.

I’ve read a lot of news stories and commentary on the Goldman affair, and frankly, I don’t really think anyone has a good sense of what actually took place. The S.E.C. is convinced Goldman misled customers, and Goldman insists it didn’t. I don’t know which party will come out victorious here, but one thing for certain is that the real loser will likely be you, the investor.

I say this because every time the government tries to curb market activity via new rules aimed to protect investors, they create a disincentive for banks and other firms to take risks. Now, I am not saying that securities laws proposed by regulators are all bad, far from it. But what I am saying is that many times, the proposed solutions to problems—such as the Obama administration’s push for financial reform—end up hurting those it’s ostensibly designed to protect.

I hope for all of our sakes that any reaction and/or regulations born out of the Goldman affair are measured, and targeted. Sadly, I fear that the politicians in power will take a much more shotgun-like, punitive approach to the situation.

With many markets around the world still on the rise, one area to watch is the exchange-traded fund (ETF) that features a strongly performing anchor stock. The iShares MSCI South Korea Index Fund (EWY) tracks the performance of the high-flying South Korean stock market. Indeed, the market recently has been hitting highs for the year and its outlook should only be strengthened by South Korean electronics behemoth Samsung providing guidance yesterday that it anticipates a seven-fold jump in first-quarter operating profits. The stock comprised roughly 18% of the fund’s holdings at the end of February.

Samsung announced that it expects its first quarter operating profit to reach 4.3 trillion won, up from 590 billion won for the same time a year ago, due largely to rising prices for computer chips. Samsung is the world’s largest manufacturer of computer chips and flat-panel screens, as well as the second-largest producer of cell phones. Samsung’s momentum likely will continue for the next two quarters, one industry analyst predicted.

I am not convinced that the current bullish market conditions will last that long, but it is clear that the biggest holding in EWY looks to have a brisk tailwind in the form of rising computer chip prices to propel it forward during the next quarter. The Samsung announcement certainly caught my attention, since the company’s semiconductor business that builds its computer chips actually lost money during the first quarter last year.

With a population of around 49 million — about the size of Italy — South Korea is an electronics and information technology leader. South Korean companies such as Samsung are known for cutting-edge technology, trendy mobile phones and flat-screen TVs. The country now ranks as the world’s 10th-largest economy, and its per capita annual income grew from US$87 in 1962 to US$24,800 today.

While the United States and much of the Western world struggle with an anemic economy, a number of emerging-market economies are among the world’s largest and fastest growing. Although the news may seemed filled with stories about debt-ridden Greece, now may be the right time to explore funds that tap into relatively stable emerging markets.

One way for investors to gain exposure to emerging markets is through the iShares JPMorgan USD Emerging Markets Bond Fund (EMB), a fixed-income fund that seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the JPMorgan EMBI Global Core Index. EMB is a U.S. dollar-dominated, emerging markets debt benchmark that tracks the total return of actively traded external debt instruments in emerging market countries.

So far, EMB is reflecting a positive trend for debt instruments in emerging markets. The fund, which began in December 2007, rose an impressive 27.2% in 2009, after a rough 2008. It had total net assets of $1.27 billion and 12.3-million shares outstanding, as of March 29, 2010.

EMB invests in debt instruments from 26 emerging market countries. The fund’s top five holdings as of March 29, 2010, were: Russia (7.5% coupon, 3/31/2030 maturity, Baa1/BBB ratings), 9.16%; the Philippines, (7.75% coupon, 1/14/2031 maturity, Ba3/BB- ratings), 4.43%; Turkey (7.25% coupon, 3/15/2015 maturity, Ba3/BB), 4.35%; Brazil (8% coupon, 1/15/2018 maturity, Baa3/BBB-), 4.08%; and Turkey (6.88% coupon, 3/17/2036, Ba3/BB), 3.79%.

Those countries are expected to have higher economic growth rates in 2010 than advanced economies, according to a recent International Monetary Fund (IMF) forecast. While the advanced economies are expected to grow just 0.6% this year, the following growth rates are eyed for Russia, 1.5%; Brazil, 2.5%; Turkey, 1.5%; Mexico, 3.0%; and the Philippines, 1.6%.

Other economic-growth forecasts are more aggressive than the IMF projections. The European Bank for Reconstruction and Development (EBRD) forecasts economic growth for Russia of 3.9% this year. In Latin America, the Central Bank of Brazil projects economic growth for its country of 5.0%, and the Central Bank of Mexico is predicting 3.9% growth in its nation this year.

A prolonged period of low U.S. interest rates and indications from the Fed that interest rates will stay low for some time are reasons to consider heightened yields abroad. Meanwhile, U.S. government debt is rising quickly and it will grow further once the effects of the new health-care program take hold. If you share my concerns about the U.S. government’s profligate spending, you may be enticed by the attractive yields of foreign bonds, specifically in emerging markets. Such bonds are not risk-free by any means, but they offer a significantly higher return to compensate you for the potential loss of principal on your investment.

Emerging markets certainly can be risky, so I advise you to monitor your investments closely and to stick to your stop losses.

Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has been all over the media lately with his plans to impose new regulation on the financial industry. One of the proposed changes to the current body of regulatory law includes the potential of designating brokers and other financial advisers as fiduciaries.

Now, you may have already thought that your broker or advisor was a fiduciary, which means just means they are required by law required to act in your best financial interest. Well, if you thought that, you’d be wrong. Most brokers and financial advisors are not bound by a fiduciary responsibility to protect your money.

The only kinds of advisors that are bound by fiduciary rules are registered investment advisers, or RIAs, and certified financial planners.

My firm, Fabian Wealth Strategies, is a registered investment adviser that knows and respects the fiduciary relationship we have with our clients. In fact, the requirement that we steward your money with the utmost caution and care fits eminently well with our personal charter to preserve and protect your capital.

I don’t think Sen. Dodd’s proposal to make all brokers and financial advisors fiduciaries will end up in the final version of financial regulatory reform. The Wall Street lobby is too powerful to let that happen. You see, the big brokerage firms really don’t want to be responsible for your money the way a RIA firm is.

I’ll leave it up to you to judge which type of advisory relationship you’d prefer, but let’s just say I know the one I prefer, and that’s the fiduciary responsibility of the RIA.

NOTE: Fabian Wealth Strategies is a SEC registered investment adviser.

After months and months of debates, gridlock and uncertainty, President Obama signed into law his coveted health-care overhaul, “ObamaCare,” with implications for you and your investment portfolio. If you feel like I do about the folly of tax-and-spend politicians adding wildly to our deficit, it’s difficult to have a “glass-half-full” kind of attitude about this legislation. While the plan is intended to provide insurance for an estimated 32 million additional Americans, it is projected to cost $938 billion during the next ten years. But the legislation also may help certain health-care companies, since the number of people who have insurance will grow dramatically, as will health-care spending.

Because it’s difficult to say exactly which stocks will benefit from ObamaCare, since we still are learning about the contents of the unwieldy new law, investors who are bullish on health care may want to consider an exchange-traded fund (ETF) that allows exposure to the entire sector. One such broad-based ETF is the Health Care Select Sector (XLV). Companies in this fund primarily include those that manufacture health-care equipment and supplies, provide health-care services, offer biotechnology and develop pharmaceuticals.

Although ObamaCare may be bad news for overburdened American taxpayers, the new health-care law likely will boost sales for a number of the health-care companies.

As far as the bill itself, the money to pay for the new government spending is going to have to come from somewhere and, unfortunately, I’m afraid it’s going to come from people like you and me. Affluent families, successful entrepreneurs, investors and employers will have to pay additional taxes and fees in order to fund this unbelievable debt.

The promise of the Chinese market is both alluring and foreboding at the same time. It is enticing due to the country’s estimated average 9.3% economic growth rate for the past 25 years, 1.3-billion population and the opening of its markets to foreign investment after decades of anti-free market policies carried out by backward-thinking communist leaders. However, skeptics point to empty buildings constructed with funds from the questionable loans of Chinese government-controlled banks as one of many reasons not to be swept up in the belief that China has transformed itself into a stable, world economic leader.

My view is mixed. I acknowledge that China holds great potential as a market to sell goods, especially as its people begin to earn more money to buy them. I also think China is gaining clout in the world as a net exporter of goods that has helped the country to hoard U.S. dollars. Further, China is keeping its goods relatively inexpensive to maintain its exporting advantage with most other countries by artificially limiting the value of its currency, the yuan.

On the other hand, a significant part of China’s annual growth could well be coming from government spending to pursue projects that may not generate a legitimate return on investment. One example is the so-called “Bird’s Nest” stadium in Beijing that still has not found a significant use since its role as the high-profile venue for the opening and closing ceremonies at the 2008 Summer Olympics. Also keep in mind that just because something has potential does not mean it will be realized anytime soon. Even though certain Chinese companies may claim sharply rising profits and revenues, the absence of any requirement to use Generally Accepted Accounting Principles (GAAP) in reporting financial information in the country leaves reason for doubt.

For those who believe in a Chinese miracle, you may want to consider investing in the iShares FTSE/Xinhua China 25 Index (FXI), which has outperformed the S&P 500 (GSPC) convincingly during the past five years.

FXI, an exchange-traded fund (ETF) launched October 5, 2004, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 Index. When the index rises 1%, FXI should gain 1%, too. It is well-established and has a large average daily trading volume of 21 million shares.

If you want to double up a bullish bet on the Chinese market, you can try the ProShares Ultra FTSE/Xinhua China 25 (XPP), which seeks daily investment results, before fees and expenses, that would be twice the daily performance the FTSE/Xinhua China 25 Index. With this leveraged ETF, a 1% increase in the index ideally would be accompanied by a 2% boost in XPP. That fund started June 2, 2009, so it is the newcomer of the pair and has an average daily trading volume of 33,244 shares. I generally like to see a fund generate an average trading volume of 100,000 shares before I recommend it.

If you’re a skeptic about China and think its market is vulnerable for a big hit, consider the ProShares UltraShort FTSE/Xinhua China 25 (FXP). That fund, launched November 6, 2007, it is intended to seek daily investment results, before fees and expenses, that correspond to twice the inverse of the daily performance of the FTSE/Xinhua China 25 Index. However, the compounding of daily returns will cause the fund’s returns to differ in the amount and direction of the target return for the same period.

Finally, I urge you to stay cautious about going double-long or double-short of the Chinese market. Those leveraged funds can be volatile, and they may take you and your investment for a wild ride in either direction.

High-yield investments include heightened risk but one way to mitigate potential fallout is through diversification. A new “fund of funds” ETF now is available that offers diversification by investing in a number of high yield closed-end funds.

PowerShares CEF Income Composite Portfolio (PCEF), just launched Feb. 19, is designed to invest in over 70 high-yield, closed end funds, with the intent of paying a lofty dividend yield. To my knowledge, this new exchange-traded fund (ETF) is the first high-yield instrument to be structured as a fund of funds.

The ETF, based on the S-Network Composite Closed-End Fund Index, is designed to invest 80% of its total assets in the securities of funds that are included in the index. The index currently consists of closed-end funds that invest in taxable, investment-grade, and fixed income securities.

The fund’s diversification across assets, strategies and managers is expected to help to mitigate specific risks. At the same time, the fund is intended to produce an average rate of distribution that is competitive with or higher than many other fixed-income investments. In addition, the ETF uses a weighting methodology that assigns greater portions of its holdings to closed-end funds that are trading at discounts.

Intra-day trading lets investors buy and sell shares of closed-end funds just as they do with other publicly traded securities. When the shares of closed-end funds trade at prices below their underlying NAVs, such funds are considered to be trading at a discount and offer investors a chance to enhance their return on investment by buying the shares at bargain prices to produce heightened yields.

If you are like me, you like bargains and high yields. This fund is supposed to give you both. Until the new ETF establishes a track record and boosts its average daily trading volume above 100,000 shares, I’ll avoid recommending it. However, if you do not mind buying a fund early in its existence, in hopes it will gain traction quickly, PCEF is an ETF that you may want to consider, especially if you like high-yield investments that offer diversification.

If you’re anything like me, you enjoy turkey at Thanksgiving. But my sights at this time of the year now are set on the country of Turkey, which is offering what could be an appetizing investment opportunity through the iShares MSCI Turkey ETF (TUR). That exchange-traded fund (ETF) gives investors exposure to a promising emerging market.

This ETF zoomed a jaw-dropping 98% in 2009 when the Turkish stock market was one of the world’s top performers. An interest rate cut to record lows by Turkey’s Central Bank last year probably fueled the stock market’s gains. Unfortunately, though, the first two months of 2010 have not been quite as kind, with the fund dipping 3.6% year-to-date through March 9 and dropping 13.3% in February alone.

TUR is a pure play on the Turkish stock market, since it seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Turkey Investable Market Index. That index measures the performance of the Turkish equity market.

So far, 2010 has ushered in new insecurities about the country’s ability to get its economic and political act together. In fact, The ISE National 100 stock market index dropped in February on news that the Turkish government arrested 40 military officials due to an alleged coup plot in 2003. The unexpected development and concerns that it could snowball sent the country’s market and its currency, the lira, falling. It seems that wary investors have headed for the exits, but Turkey still could provide a good opportunity for investors who are willing to take a bit of a risk. And now may be the perfect time, since prices are far lower than they were just two months ago.

If you are unfamiliar with Turkey, here’s a quick snapshot of its tumultuous past and promising future. With a population of 72 million people, Turkey is positioned on the strategically important border between Europe and Asia. A persistent candidate for entry into the European Union (EU), negotiations between Turkey and the EU keep stalling because of Turkey’s lack of economic reform programs.

While it once was an economic basket case, Turkey has been rebounding during the last decade by reining in inflation. Turkey’s reward is that its economy grew an average of nearly 6% between 2002 and 2008. Unfortunately, the credit crunch in 2008 and 2009 hit the Turkish economy hard and caused it to shrink 13.8% in the first quarter of 2009 and by 5.8% for the full year. However, Turkey’s fiscal and monetary stimulus programs, combined with a healthy banking sector, helped to cushion the blow. Unlike other emerging markets in Europe, Turkey survived the financial downturn without relying on an emergency bailout package from external lenders. The country now is expected to grow 3.5% to 4% this year.

A further encouraging sign arose Feb. 19, when Standard & Poor’s raised its long-term foreign currency and local currency sovereign credit ratings to BB and BB+, respectively. Although such ratings are still below investment grade, this action should have been positive for the Turkish stock market. However, news broke shortly thereafter of the alleged military coup plot from 2003 that sent the ETF plummeting. It simply shows that Turkey is a volatile market and investors must be ready to brave the plunges, while they also look to ride the surges.

Join me on Saturday, March 6, at 12:00 p.m. (noon) Pacific Standard Time, for a FREE update on the financial markets in 2010. In this teleseminar, titled “Return of the Bear Market,” I will be offering my opinion on how you should be managing your assets as we navigate these choppy market waters.

Let’s face it, the last two years have been a wild ride for both stock and bond investors. What I call Phase One began in 2008 with the biggest decline in stocks since the Great Depression. Phase Two saw a recovery of more than 50% for the S&P 500 Index. Most investors now have been pacified by Wall Street and Washington, and many think the worst is behind us.

I believe that we are close to entering Phase Three of this investment cycle, and that could mean another devastating wave of wealth destruction. The good news, however, is that there is time to prepare, as well as clear signals on the road ahead that will give us time to adjust before any real damage is done.

Four key points you’ll learn in this seminar are:

• Why stocks and bonds have the potential to enter a new bear market
• What are the warning signs to look for in the markets
• Where investors can seek safety during the next 12 months
• How you can profit from the crisis

This FREE, one-hour teleconference will be held exclusively for the first 800 registrants, and judging by the participation in our last teleconference, we will reach capacity quickly. We urge you to take advantage of this opportunity and reserve your spot today.

Years ago, people risked their lives to escape from the tyranny of the former Soviet bloc countries. Now, those same nations may prove to be an effective place for investors to flee from the debt problems cropping up in Greece and other fiscally faltering nations in Europe.

One way for investors to gain exposure to such non-eurozone nations is through the MSCI Emerging Markets Eastern Europe Index Fund (ESR), an exchange-traded fund (ETF) which seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Eastern Europe Index. Deutsche Bank recently issued a report that estimated non-eurozone countries, such as Poland and the Czech Republic, will enjoy faster economic growth than eurozone nations.

So far, ESR is showing that such positive views about Eastern Europe have merit. The fund rose 11.08% through the end of January, since its inception on September 30, 2009. ESR invests in equities from four countries, Russia, Poland, Hungary and the Czech Republic. Nearly three-quarters of its investments were based in Russia at year-end 2009, while Poland ranked second and accounted for more than 14% of the fund’s portfolio. Two energy companies, OAO Gazprom-Reg S ADS, 21.21%, and Lukoil-SPON ADR, 9.75%, ranked as the fund’s largest investments at the end of January.

In addition, both Russia and Poland have economic growth rates that are projected to top those of the eurozone. The European Bank for Reconstruction and Development (EBRD) is forecasting economic growth this year of 3.9% in Russia and 2.3% in Poland. Those are pretty good growth rates, especially considering much of the rest of the world is struggling.

Certainly, no region of the world is immune from the economic weakness that has spread to virtually every corner. But the eurozone and the debt woes of its weakest countries leave that region in a vulnerable state. Safe harbors are not easy to find in a financial storm, but Eastern Europe may be one place that investors can duck for cover.

I currently am not recommending ESR, but it is a fund that I am tracking. If you believe that Eastern Europe offers a refuge from the debt problems threatening the eurozone, ESR is one fund that you may want to consider.

In the following interview I sat down with my CPA, Lee Haight on February 9, 2010 to discuss three subjects that tax payers need to focus on:

1. 2009 tax return preparation
2. 2010 tax planning
3. Roth IRA conversion opportunities

Please click below to access this recording in either WMA or MP3 format:

Listen in Windows Media

Download the MP3 (right click and choose “save as”)

Note: The opinions expressed in this interview should not be considered personal investment or tax advice. Everyone’s situation is unique. You should consult a professional Certified Public Accountant (CPA) for further clarification on your personal tax questions.

As of yesterday we’ve seen the U.S. equity markets drop more than 7% from their January highs, and this kind of sharp pullback has me proceeding with extreme caution. But it’s not just the domestic market that’s been hit with a selling wave. International markets have retreated even further off their highs, with several major global stock indices now trading below their long-term support levels.

It seems that wherever you look, risk in the financial markets is rising—and that’s why it’s time for you to take action.

At Fabian Wealth Strategies, we’ve already begun pairing down both our domestic and international stock holdings to protect our clients from the ravages of a global sell off. Because our philosophy of active portfolio management includes a strong sell discipline, we are able to preserve investment capital whenever the bears start flexing their muscles.

Recently, I’ve been offering a FREE mutual fund portfolio assessment on my radio show, Doug Fabian’s Wealth Strategies. In my review of countless investor portfolios, I have found that way too many people are unaware of the lackluster performance of their mutual funds, and the high fees they’re being charged for those anemic results.

When I evaluate your portfolio, I’ll let you know the exact short- and long-term performance of your mutual funds, the total expenses you’re being charged—and of course, my opinion on every one of your holdings. I also can help you establish a sell discipline on your investments, and determine if your portfolio is property aligned with your financial goals.

I will also show you the benefits of switching from high-fee mutual funds to low-cost exchange-traded funds (ETFs). I love ETFs, as they allow you to save money while also providing you greater flexibility to adjust your portfolio to the prevailing market conditions.

Now more than ever, it’s important for you to understand what you own, why you own it, and what your game plan is if we see the return of another wealth-destroying bear market.

To schedule your FREE mutual fund assessment, just give us a call at (800) 391-1118.

This offer is available to goal-oriented investors with more than $250,000 in their investment portfolios. Contact us today for a brief introduction, and to schedule your complimentary mutual fund assessment.

Sincerely,

Doug Fabian
President, Fabian Wealth Strategies
Host, Doug Fabian’s Wealth Strategies Radio Show

Fabian Wealth Strategies, Inc. is a registered investment advisor with the U.S. Securities and Exchange Commission. Doug Fabian is a registered investment advisor representative. The information expressed by Fabian Wealth Strategies is for informational purposes only and should not be construed as a recommendation to buy, sell, or hold any specific security.

As we begin 2010, we are entering what is likely a new era in the investing and financial landscape, and now is the time to prepare and execute a safe and profitable investment plan for the year ahead.

It is with that in mind that I proudly invite you to tune in for this LIVE Webcast presentation, titled “ETF Strategies in a Difficult Market.” This presentation will help you gain the knowledge and critical insights you’ll need to make smarter, more informed investment decisions in 2010 and beyond.

Viewing is free, so please click on the link here for more details and to register for this and other live Webcast events, which will come to you from the upcoming World MoneyShow Orlando.

You can also visit MoneyShow.com to see the comprehensive event schedule, and register free to be a part of this all-new for 2010 World MoneyShow Orlando Webcast event series. I look forward to connecting with you.

President Obama just submitted a new 10-year federal budget that has me very worried. The primary reason for my concern is tax hikes. As I expected, the mammoth $3.8 trillion budget for the next fiscal year raises taxes on businesses and upper-income households by $2 trillion over 10 years. And after what could be called very minor spending cuts, the country still will face $8.5 trillion in added debt over the next decade.

The budget for fiscal 2011 imposes nearly $1 trillion in tax increases on families with income above $250,000 over the next 10 years, and it does so by allowing the Bush tax cuts to expire. That’s income, mind you, and not take-home pay or profits. That means a small businessperson with income of $250,000 or more would pay a much bigger portion of that income to Uncle Sam. And because most of the jobs created in this country are created by small business penalized by the new taxes, I think we can safely say that this budget is not conducive to job growth.

How much will taxes go up? Well, the two top income-tax brackets would rise to 36% and 39.6%, from 33% and 35% respectively. For families earning more than that what the president thinks is a mystical sum of $250,000 per year, capital gains and dividend tax rates would rise to 20% from 15%. According to the Wall Street Journal, upper-income families would face $969 billion in higher taxes between 2011 and 2020.

To put it quite simply—the taxes are coming, the taxes are coming, and it’s your job as a smart citizen to make sure you take steps to keep your tax liabilities as low as legally possible.

If you don’t already have a good CPA, then I highly recommend you consult with one soon, especially now that tax season is here.

The rollout of exchange-traded funds (ETFs) focused on precious metals other than gold and silver is well worth bringing to your attention. Last week, I featured a fund that invested in platinum and this week I will introduce you to a fund that is tied to a different precious metal, palladium.

It would not surprise me in the least if you never have invested in palladium or if you did not know that the exchange-traded fund ETFS Physical Palladium Shares (PALL) hit the market last month. I have not recommended PALL, but I am impressed that its average daily trading volume has soared to 382,000 in less than a month. I normally look to see if a fund has average daily trading volume of at least 100,000 shares before even considering its mention, and PALL is almost four times that level in just over four weeks of existence.

PALL, issued by ETFS Palladium Trust, is designed to reflect the performance of the price of palladium bullion, less the trust’s expenses. The ETF’s shares are aimed at investors who want a cost-effective and convenient way to invest and to gain exposure in palladium, a rare, silvery-white metal that is used in electronics and in catalytic converters for automobiles.

The fund is down slightly since opening at $43.93 on Jan. 14, before closing at $43.25 on Monday, Feb. 1. However, it jumped 3.73% in a single day on Feb. 1. Also on that day, PALL’s percentage gain outstripped the performance of a prominent fund focused on gold, the SPDR Gold Shares (GLD), up 2.26%, and a fund targeting silver, the iShares Silver Trust (SLV), up 2.89%.

Beware that the rise and fall of each precious metals fund does not exactly mirror the performance of the precious metal that it attempts to track. The price of gold on Feb. 1 edged up 2.05% to reach $1,105.20 an ounce for the day, while silver jumped to $16.67 an ounce for a gain of 2.96%. Meanwhile, the actual price of palladium rose to $429, up $15 an ounce, or 3.62%. While those returns are not precise matches with their related funds, they still are reasonably close

It’s not easy being in power when the electorate is riled up. President Obama certainly found that out last week in Massachusetts, where the election of Republican Scott Brown to the vacant seat of the late Ted Kennedy shattered his party’s filibuster-proof supermajority in the U.S. Senate.

This week another political luminary found out that not everyone approves of the job he’s doing. I am speaking here about Federal Reserve Chairman Ben Bernanke. Although it looks increasingly as though Mr., Bernanke will be confirmed for a second term as head of the central bank, many in the Senate—Democrats and Republicans—have expressed their lack of confidence in the way the Fed Chairman managed the financial crisis.

And finally we have Treasury Secretary Timothy Geithner, who came under fire today from Democrats and Republicans in Congress for his role in the $180-billion-plus taxpayer bailout of insurance giant American International Group (AIG). Geithner claims he played no role in withholding information about AIG deals with business partners, but in hearing held today on Capitol Hill, one member after another expressed their anger over the sordid situation.

Rep. Stephen Lynch, D-Mass., told Geithner: “It just stinks to the high heaven what happened here. The disclosure was not there at the proper time to tell the American people and tell this Congress what was going on.”

In tonight’s State of the Union address we’re likely to find out just how aggressive President Obama is in combating the tough week he and his administration have had. Already we know the president is going to come out swinging on big banks and Wall Street firms, with new proposed legislation to limit the size and scope of financial institutions.

Hey, when you’re down and out, why not beat up on America’s favorite whipping boy—business. Unfortunately for the president, I think he’s barking up the wrong tree. In fact, I think he’d be better served by redirecting that anger inward.

Precious metals such as gold and silver have enjoyed a strong move higher in recent months, so the roll out of two new funds focused on other precious metals is worth highlighting. I like funds to establish a minimum volume before I recommend them, so I simply will keep an eye on these funds for now. But they both are gaining trading volume quickly and they warrant watching closely.

This week, I will feature ETFS Physical Platinum Shares (PPLT), a trust that is designed for use by investors who want a cost-effective way to gain exposure to physical platinum. The shares are issued by ETFS Platinum Trust and are intended to reflect the price of platinum, less the trust’s expenses. It is similar to the high-profile SPDR Gold Shares (GLD), since each actually holds bullion bars of the precious metal that it represents.

PPLT began trading Jan. 8 and it already is racking up a daily trading volume that is averaging close to 300,000 shares a day. It is an impressive start for a new fund. Platinum jumped in value 56% last year. However, PPLT itself is down 2.84% between its opening price on its first day of trading and its closing price on Jan. 26. If the retreat continues for awhile, it would offer you a reduced entry price for buying PPLT. The ETF also is appealing because it has a modest expense ratio of just .60%.

An investment in PPLT is not the only way that you can place a bet on platinum. Exchange-traded notes (ETNs) tied to platinum can be purchased through UBS E-TRACS Long Platinum TR ETN (PTM) and iPath Dow Jones AIG Platinum TR Sub-Index ETN (PGM). However, PPLT stands out as the first platinum investment instrument to be launched on the U.S. exchange-traded fund market. As any reader of my ETF Talk columns quickly learns, I love ETFs for their cost-effectiveness and diversification, among other advantages.

Your father and others of his generation may not have gone any further in buying precious metals other than investing in gold or silver. Gold and silver are as exotic as most investors probably will ever get in buying precious metals. But with the stock market still looking volatile and inflation potentially on the rise as many governments around the word run up big deficits, you may want to include more than just gold and silver in your portfolio to help protect your money. Ever since medieval times, metals have proven their worth as sturdy shields.

Most investors sustained serious damage to their wealth in 2008 – damage that, in many cases, will be difficult to recover from. Certainly Wall Street titans, reckless lenders and irresponsible home buyers all deserve their share of the blame.

But one part of the financial world has not received much scrutiny for its role in the evaporation of investor wealth, and that is the mutual fund industry.

Mutual funds control the majority of Americans’ retirement assets through 401(k)s, IRAs and annuities. Sadly, a gullible public has bought into the idea that steady investments in mutual funds, regardless of market conditions, is the way to make their financial dreams come true. This is one of the biggest fallacies of investing, and why mutual funds are hazardous to your wealth.

In my latest special report entitled, Mutual Funds are Hazardous To Your Wealth, I expose the five serious flaws of these investment vehicles and talk about how exchange traded funds are a far superior alternative.

Why? Because ETFs are less expensive to own than mutual funds and more diversified than individual stocks. For most people looking to grow their serious money over the long term, ETFs are quite simply the best investment vehicles available today.

Click here to download this free special report as a PDF.

As a bonus to this report I would like to offer you a free Mutual Fund Assessment – this includes an in-depth review of your investment goals and analysis of all the funds in your portfolio.

This offer is available for goal-oriented investors with more than $250,000 in their investment portfolios. Contact us for a brief introduction and to schedule a phone call time with you to get some help.

To schedule your free Portfolio Review, call us at 800-391-1118.

Sincerely,
Doug Fabian
President, Fabian Wealth Strategies &
Host, Doug Fabian’s Wealth Strategies Radio Show

Note: Fabian Wealth Strategies, Inc. is a registered investment advisor with the U.S. Securities and Exchange Commission. Doug Fabian is a registered investment advisor representative. The information expressed by Fabian Wealth Strategies is for informational purposes only and should not be construed as a recommendation to buy, sell, or hold any specific security.

It’s time again for our quarterly lemon-squeezing ritual. That’s right, it’s time for us to expose the worst-performing mutual funds for what they really are — sour investment vehicles that will make your portfolio pucker.

For Q4, 2009, the Mutual Fund Lemon List contains 1,566 mutual funds totaling $651 billion in assets! Now to be classified as a lemon, the fund must pass strict screening criteria: it must underperform its peer group average for the last 12 months, as well as for the last three and five year periods.

Incredibly, out of this quarter’s universe of 1,566 lemon funds, over 38% (a total of 605) actually had negative annualized returns over the past five years.

It’s becoming increasingly clear to me that investors need to wake up to the reality that many mutual funds just can’t perform as well as those exchange-traded funds (ETFs) with the same investment objective. Sadly, the result is that many investors are losing money that they really cannot afford to lose.

There really is no reason to continue investing in under-performing mutual funds. To find out if you own a lemon fund, simply click here.

With the energy sector exhibiting a second-straight year of weakened demand, the situation could be appealing to investors who may be willing to short utilities in a search for quick profits. Exchange-traded funds (ETFs), such as ProShares UltraShort Utilities (SPD), are available to allow aggressive investors to bet on a retreat in utility stocks. The question is when to pull the trigger on such a trade, since utilities still seem to be aided by the stock market’s general upward trend.

ProShares UltraShort Utilities is a leveraged ETF that seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Utilities Index.

Indeed, U.S. electricity output fell 3.7% last year to mark its biggest drop since 1938, according to federal statistics. That decline in output comes on the heels of close to a 1% production dip in 2008. Reduced U.S. energy production does not appear to be a fluke. The downward trend in demand and production for energy are attributed to a slow economy, conservation efforts and, at least last year, a relatively mild summer in many parts of the United States. As a result, forecasting demand and revenues is becoming increasingly challenging. Without a clear sign that energy demand will be rebounding, it makes it difficult for utilities and the analysts who follow them to make accurate projections.

The question for investors is whether the energy sector is on the verge of giving up some of the gains that it collected since the market began advancing last March. I currently am not recommending shorting energy stocks; however, a case certainly can be made for doing so.

If you needed to pick the industries that are most vulnerable to a retreat, utilities probably should be on your list. Of course, it does not mean investing in a leveraged short fund will help you to turn quick profits right away. You may want to wait and watch the sector in the coming weeks before deciding whether shorting utilities with a leveraged fund is something that you want to try.

On Saturday, Jan. 9, I held my first investor teleconference of the year. This call was tremendously successful, and I want to thank all of you who called in and joined the fun.

Now, if you didn’t get a chance to call in, then don’t fret. A recording of the call is available now at my Web site. To get your FREE download of this call, click here.

As we usher in a new year, the economy is projected to improve from the doldrums of 2009. One way to ride the expected economic turnaround this year is to invest in steel. Savvy investors can invest in steel by buying the Market Vectors Steel ETF (SLX). This exchange-traded fund (ETF) has been climbing since last spring and should gain further momentum from rising demand. An ETF also offers diversification by investing in a basket of companies in the steel industry, not just one that could melt down unexpectedly.

J.P. Morgan appears to be taking notice of steel’s improved outlook. The investment firm recently raised its price targets on three of the industry’s major companies, U.S. Steel (X), AK Steel (AKS) and Arcelor Mittal (MT). The report also mentioned that scrap prices have rebounded by roughly 25% since their mid-November lows and could rise by another 15% due to seasonal supply constraints, strong exports, and low inventory levels at the mills. This data is significant because the price of scrap metal is an economic indicator. When the price of scrap metal rises, the economy typically is on the upswing.

A big reason for the increased demand in steel is the voracious appetite for the metal that is coming from China. The Chinese economy has been growing quickly in recent years, while many other economies around the world have been languishing. China’s surging demand for steel is gaining widened attention.

“Already the world’s largest producer by far, the country is expected to rev up production by nearly 10%, The Wall Street Journal reported Jan. 11. “But the higher output likely won’t exceed demand, pushing prices higher world-wide for steel, its raw materials and even coal.”

Steelmakers that temporarily closed a number of mills and cut production as economic conditions sagged last year now are boosting production to address the increased demand. Resurgence in the steel industry is lifting the share prices of the public companies that produce steel.

Join Doug Fabian for his first investment conference of the New Year. On Saturday January 9, 2010 at 12:00 pm (noon) Pacific, Doug will be discussing the investment landscape for 2010.

Doug has been writing on the subject of stocks, interest rates, commodities, and currencies for decades and he is presenting a unique opportunity to learn from his expertise. He believes that 2010 will present an entirely new list of winners and losers in the investment markets, but you must be on the call to act on Doug’s advice.

This one hour tele-seminar will be held exclusively for the first 800 registrants. Early registration is your best way to ensure you will have a seat for Doug’s thoughts on the the investment markets.

Five important keys you’ll learn:

• His opinion on the direction of stocks in the New Year.
• What sectors Doug believes show the most potential for profits.
• What you can do to hedge your portfolio against rising interest rates.
• His thoughts on Gold for 2010.
• Which commodity ETFs deserve your attention right now.

The live teleconference will reach capacity because we’ve built an enormous following for this learning series. We urge you to take advantage of this opportunity and reserve your spot today.

Click here to register for this event.

Last week we talked about what I think will be a big investment theme for 2010, rising interest rates. This week we take a look at the second installment in our series on the top 10 investment themes for 2010—currency upheaval.

Now when I say currency upheaval, I am talking largely about the fortunes of the U.S. dollar. To be certain, the dollar has had a lot of upheaval in 2009.

After starting the year with a stout surge, the dollar’s fortunes turned tail in March. And with a few brief periods of sideways movement, the greenback plunged to record lows in late November.

Interestingly, the dollar has been on a sharp run higher since the first week of December. In fact, the dollar recently broke above its short-term, 50-day moving average (blue line), and now appears on route to break above its long-term, 200-day moving average (red line). If the greenback can breach this technical barrier, it could be the start or a protracted bull in the U.S. dollar vs. rival foreign currencies.

This is the kind of currency upheaval I expect will take place in 2010. As more and more countries try to keep the value of their currency low to help stimulate exports, we are likely to see more money move into dollars. Also, the rise in the dollar could mean a pullback in the price of gold.

The price of gold, as represented by the streetTRACKS Gold Trust (GLD), has been on a tear for most of the year. However, since the dollar’s December resurgence, the value of gold has declined precipitously.

I think that the currency upheaval we’re likely to see with the dollar—and with other currencies around the globe—in 2010 will mean opportunities on both sides of the gold trade. It will also mean opportunities on both sides of the international equity market trade, and on both sides of the domestic market trade.

Just about any way you look at it, currency upheaval in 2010 will cause both dislocation and opportunity for investment capital. The trick, of course, is to know which is which, and to be on the right side of the trade.

Investors who like to profit from well-timed currency investments may want to consider betting against a weakening euro. Indeed, the U.S. dollar rallied overnight and pushed the euro down today as U.S. stocks, oil and gold dipped.

With investor interest waning in higher-yielding currencies such as the euro, the dollar is ascending. You may recall me voicing my belief in the Dec. 16 ETF Talk that the dollar had fallen below what I viewed as its true value, and that its downward trend was starting to change. Well, that reversal of the dollar’s fortunes appears to be taking hold.

One way to profit from a flagging euro is to invest in the UltraShort Euro ProShares (EUO), an exchange-traded fund (ETF) that seeks to replicate, net of expenses, twice the inverse performance of the EUR/USD daily price change. Basically, with EUO, you are betting on the dollar’s rise vs. the euro. Right now, betting against the euro is looking like a shrewd move.

The dollar hit intraday highs against the euro, yen and the Canadian dollar after the Dow Jones Industrial Average opened lower today. Reports also surfaced this morning that loans to companies in the euro zone fell in November, which put further downward pressure on the euro.

In my experience, currency trends often seem to last longer than they should. With the trend now working in EUO’s favor, the fund could be a place where currency investors may want to put a small percentage of their funds.

With equities and commodities under pressure in recent weeks, the dollar is strengthening at the expense of the euro and other currencies. With the economic recovery in Europe appearing as though it may lag behind other regions of the world, the European Central Bank could be forced to remain in neutral as other central banks look to fend off inflation in the months ahead. If that situation arises, the euro will be vulnerable to further declines.

I can’t believe it, but 2010 is just about a week away. And soon, we’ll all be resolving to not make the same mistakes we made in 2009. If you haven’t started making your financial New Year’s resolutions for 2010, let me give you a little head start. Here’s just a sneak peak at what I want smart investors to resolve to do next year:

1. I will prepare my family for an unpredictable economic environment in 2010.
2. I will have a positive increase in my liquid net worth.
3. I will save in excess of 10% of my gross income in my retirement accounts.
4. I will save and safely secure at least three months of living expenses.
5. I will stop losing money on bad investments and/or bad investment advice.

I know these resolutions may seem simple, but honestly, did you accomplish all of these goals last year? If the answer is no, then why not make 2010 the year when you do things right?

There is no time like the beginning of a new year to really focus on your goals, so take control of your financial life and make 2010 the beginning of a wonderfully profitable new decade.

Subscribers to my investment newsletters and trading services know about my passion for exchange-traded funds (ETFs). Over the past year, I have provided you with features relevant to investors who are looking to improve their portfolios with a variety of funds that are both diversified and cost efficient. Now, I want to get back to the basics of ETF investing. Or, to say it more poetically, “ETFs, oh, how I love thee.”

One of the top reasons I love ETFs is their modest cost. ETFs offer low expense ratios, and annual expenses typically are deducted from dividends. ETFs also produce fewer capital gains and are more tax efficient than mutual funds.

In addition, ETFs offer diversification that reduces risk. The funds typically track indexes that are made up of a basket of stocks. Investors can find ETFs that cover every major index, asset class, and sector. Whether you favor commodities, healthcare, technology or real estate, there is a diversified ETF available to you.

ETFs also are transparent, since they are required to disclose their exact holdings and the percentage of each asset that a fund owns. Because ETFs are traded on exchanges just like stocks, the funds provide liquidity to investors who want to buy and sell them in the open market. But remember to be sure a fund’s trading volumes are adequate to provide liquidity. While not a strict rule of mine, I generally do not recommend ETFs that have an average volume of less than 100,000 shares a day.

Finally, I love the simplicity and variety of ETFs. You usually can find a bull market someplace, no matter what markets elsewhere are doing. The challenge is choosing the sector or the region that investors will begin to favor next.

Here’s to a prosperous New Year!

The U.S. dollar had been getting hammered for much of the past year, but recent debt problems in Europe are giving the greenback a lift. Fortunately, there are exchange-traded funds (ETFs) that you can buy to help you profit from the rising dollar.

Whether the recent upward trend in the greenback is only short-lived, or the start of a long-term trend remains to be seen. However, currency swings due have a tendency to be sustained longer than most might expect. The latest example is the big drop in the value of the U.S. dollar earlier this year. In my view, this plunge exceeded what reasonably was warranted.

If the dollar continues to rebound, the greenback’s resurgence could offer a nice chance to profit. One of the funds that I have on my radar screen for investing in the dollar is the PowerShares DB US Dollar Index Bullish (UUP).

Keep in mind that the greenback often is considered a safe-haven currency. When markets are jittery and governments are in danger of defaulting on their debt obligations, the dollar generally rises. A key reason is that investors seek the protection of a currency that is backed by the full faith and credit of the U.S. government. Yes, Uncle Sam still conjures up images of strength when the rest of the world seems to be falling apart.

The Wall Street Journal wrote a scary story about the outlook for the euro in its Dec. 15 issue. It described how the euro is tumbling as debt woes spread across the euro zone. Greece, for example, appears unable to stem growing fears about its debt problems, despite government pledges of austerity and fiscal rigor. New worries about Austrian banking, after this week’s surprise nationalization of one of the country’s banks at the behest of the European Central Bank, also raised red flags about the euro. Yesterday, the euro dropped to its lowest value since October by falling to $1.4505.

In addition, a German government budget spokesman said this week that exploding budget deficits of economically weak European countries will force his country and other financially strong nations throughout the continent to consider how to support their struggling neighbors. These so-called “PIIGS,” i.e., the countries of Portugal, Ireland, Italy, Greece and Spain, are weighed down by big budget deficits and discouraging growth prospects.

Without question, the U.S. government is running up record deficits of its own and its economy is not exhibiting robust growth either. But America still has a reputation as a country that has proven its creditworthiness. The reaction of the market during the past week or so confirms the sentiment that the dollar offers a safe harbor in the midst of a brewing financial storm.

You may not have heard this news, but Greece just had its bond rating cut to BBB from Moody’s. Now, you may be asking what the big deal is. After all, what does Greece’s credit rating have to do with my investments here at home? Well, just like you, countries have credit ratings. They issue bonds and borrow from banks just like a large corporation does. A downgrading of a country’s sovereign debt means they are likely in fiscal difficulty, and that’s never good.

One of the investment themes I believe will take shape in 2010 has to do with large debt defaults from strong corporate and sovereign institutions that were formerly considered bulletproof. Now, many people here in the United States think we have the worst debt levels in the world. That’s in part why we are seeing the rush to own gold, and the rush to put money to work in international markets. Sure, we do have our debt problems in this country, but they are far from the level of dangerous debt many other countries hold.

A widespread sovereign debt crisis could rock the world’s stock markets, and it could even cause a stampede back into the U.S. dollar. I will be watching this Greek tragedy unfold in the weeks and months ahead, and I promise I will let you know if I think it will affect your investments here at home.

If we do see a sovereign debt meltdown, the crisis it will likely show up first in the bond market. In last week’s radio show, I talked about how investors need to start paying attention to risk. Most people are aware of the risk in the stock market, but when it comes to the bond market, somehow people think that they can’t lose money.

So far this year, investors have poured more then $230 billion into bond funds. This is a huge amount of money, especially when you consider that only a net $2 billion was funneled into stock funds. This tells me that investors now are thinking that they are more properly diversified than they were last year. They reason that if stocks take a hit again, at least their bonds will buoy their portfolio. Well, I think this line of thinking is a big mistake.

Bonds can get hurt in two primary ways. First, if interest rates rise, the value of bonds go down sharply. A 1% rise in long-term interest rates will send bonds down 7-15%, depending on the type of bond. Second, there is credit risk. As I mentioned earlier, we are starting to see things happen in the bond market that rarely happen. A Sovereign country going into default is a risk nobody has really planned for, and a blowup in this market could really send the value of all sorts of bonds lower.

As of right now, the bond market is holding up fine. If, however, interest rates rise, and/or if countries around the world continue having their credit ratings slashed, it could spell bond market trouble.

One indicator of early bond risk is the trend in high-yield corporate bonds, otherwise know as junk bonds. So far junk bonds still are enjoying a solid uptrend. But if this uptrend begins to falter, and if bonds start to lose their luster, then even those “safe” bond positions could be at risk.

If you want to find out how to prepare yourself from the risk of a potentially substantial bond market downturn, then I suggest listening to my radio show last week for more details. To listen to the show, just click here.