david.fm

In my recent video on CNBC, I have shared my cautious view on US equities and reaffirmed that, in the mid-long term commodities are still a very good play (see the fabulous four.

I am cautious on US equities because there is little connection between the real economy and wall street. With unemployment at a 26 year high (in Europe we are at a 10 year high, so is not a much better picture) and the S&P 500 rallying over 50% since March, there might be a short term correction in equities market.

This said, after my interview, US has reported 3.5 GDP growth hence officially out of the recession. But problems remain commodities will go higher if the dollars keeps sliding. Oil is back over my april prediction of 80$ a barrel and July prediction of over 80 by year end and might reach even new highs by December or January 2010.

In my current interview, I invite to be cautious as we might see corrections and a rebound of the dollar and temporary downside on commodities - this wouldn't impact the long term commodities bullish market, that is mostly fueled by increasing demand in emerging economies like China and India and decreasing supply - but might have an impact in the short term.

Some of my students had asked me to provide with some recommendation or advise related to my television appearances. While I cannot recommend specific investments, I am glad to provide some guidance to access commodities and equities through low-fees ETFs:

If you are looking to gain exposure to commodities through a broad index, you can consider the Rogers International Commodity Index ETN - quoted on the NYSE symbol RJI

This gives you access to 35 commodities at a total 0.75% annual fee.

If you want to go more specific, you can look at Agriculture only (that didn't increase so much this year)
RJA

For international pharmaceuticals the Wisdom Tree International Pharmaceutical ETF is an interesting play as their index is dividend weighted and not based on capitalization

Finally if you want to play oil producing countries the WisdomTree Gulf ETF might be a good way to access markets like Qatar, Kuwait, UAE and Oman (I have just returned yesterday from our MBA private fairs in Dubai, Qatar and Oman. Little signs of crisis as both the hotels and plane were very much fully booked) with a reasonable 0.88% per year fee

In any case caution, at least till the end of the year, might be required. This doesn't mean that we should keep all our portfolio in low yielding cash or bonds but simply that volatility is to be expected.

UPDATE: 30 October Apparently my invitation to be cautious was justified "Stocks tumbled Friday, giving back all of the gains from the prior session, as worries about the recovery escalated after a pair of reports on the consumer and as the dollar rallied.

The Dow Jones Industrial Average dropped 249.85, or 2.5 percent, to close at 9,712.73. for more click here ..." and Dr. Doom - Marc Faber - seems to share some of my views