Golden Strength

Robert Hsu, January 27, 2009

There is no doubt that this year is going to be a difficult one for the global markets. In 2008, we saw historic collapses and stock market volatility that would make any investor want to run and hide. And while this may be tempting, investors must realize that there are still solid investments available to make them money, even in these tough economic times.

In China Strategy we have been filling the portfolio with specific companies that are set to grow in the coming months and years. But we have another holding that actually serves as a hedge on the market. It's the streetTRACKS Gold Trust ETF (NYSE: GLD). GLD is an exchange-traded investment trust backed by gold bullion, and its price tracks the performance of the metal. The shares can be bought and sold instantly through any standard brokerage account and have an average daily trading volume of over three million shares.

So why have we chosen to invest in GLD as a market hedge? Because offers a good protection during tough times for the economy and market. When the U.S. is suffering from inflation, a weakening U.S. dollar and geopolitical tensions, gold becomes a safe haven for investors. That's why, in tough economic times, investors tend to flock to investments in gold.

Therefore, with the coming months likely to be tough for the global economy and markets, I have recommended that my China Strategy subscribers invest in the metal through GLD. And as global economies re-inflate their way out of the recession, I look for the stock to continue its upward trend. For my latest update on GLD, as well as my specific buy-under price, join China Strategy today.

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