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Invest with Common Sense

October 05, 2009 – Comments (1) | RELATED TICKERS: PBJ , VDE , MOO

One of the best advances the stock market has made are ETF's - they allow you to invest with common sense.

20 years ago you may have believed computer manufacturers would take off.  Buy DELL and you were goldent, GateWay and not much.  Your common sense told you the right thing to do, but your opportunity to buy the whole sector was limited.  Mutual funds were never specific enough to get to just what you wanted.  They had energy mutual funds, but not just crude oil.

Common sense once again dictates the obvious - food and energy are going to be big advancers in the next two to five years.  Why? Simple inflation.  But will General Mills be the winner or Smuckers?  The following ETF's may help solve that dillema.

PBJ, MOO, DBA, JJA, UAG, RJA, GRU, FUD

We all know energy is not getting any cheaper - regardless of a short-term steep sell off earlier this year. But will solar take off, oil, nuclear, fuel cells?  And which stock will do well or poorly withing those categories?

Take a look at these ETF's.

IXC, IYE, VDE

As a rule, stay away from 2x, 3x ETF's.  They are merely vehicles for traders and will do poorly long term.  A 3x, like ERX, will NOT make you money if you buy and hold for five years - regardless how high the energy sector rises.

But this blog isn't so much about specific ETF's as it is about using common sense to invest in your future.  Energy and Food are set to take off - as they always do in periods of high inflation.  Common sense makes the trade obvious, ETF's make the trade easy.

Good luck and invest well.