On Demand

Go On Safari: Access Africa With An ETF Play (AFK)

As I wrote last week, the central bankers of the world are staging a monetary arms race to see who can pump more liquidity into the world economy. ECB President Mario Draghi and Fed Chairman Ben Bernanke have each taken turns upstaging the other.

Now, it's Japan's turn. The world's third-most-powerful central bank has joined the fight, launching a fresh round of monetary stimulus of its own. The Bank of Japan is expanding its asset purchase scheme by another 10 trillion yen to a full 80 trillion--or about $1.02 trillion in US dollars.

I don't expect this to be the last shot fired. The ever quotable Guido Mantega, Brazil's finance minister, has reiterated his claim that the world is in a "currency war." He's also made it clear that Brazil does not plan on losing it, meaning that Brazil will resort to loose monetary policies too in order to prevent Brazil's currency from getting unmanageably expensive.

What does any of this mean for investors? In an interview with the Financial Times this week, Mantega said that "risk aversion had fallen and animal spirits have increased."

I couldn't have said it better myself. Until the market shows any real signs of weakening, I recommend that investors maintain an aggressive portfolio. And right now, this would include frontier markets such as Africa and the Middle East. I recommend investors pick up shares of the Market Vectors Africa Index ETF (AFK) and plan to hold for the remainder of 2012. As always, use a stop loss that is appropriate for your risk tolerance.

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About the Author


Charles Lewis Sizemore, CFA, founder and editor of Macro Trend Investor (formerly The Sizemore Investment Letter), is dedicated to finding superior investments backed by powerful macro trends—before you hear about them on the nightly news or read about them in the newspaper or on the Internet. He has been a frequent guest on Bloomberg TV and Fox Business News, has been quoted in Barron’s Magazine, The Wall Street Journal,and The Washington Post and is a frequent contributor to Forbes Moneybuilder, GuruFocus, MarketWatch and InvestorPlace.com.

Charles is the co-author of Boom or Bust: Understanding and Profiting from a Changing Consumer Economy (iUniverse, 2008); and worked alongside best-selling financial author and economic strategist Harry S. Dent, Jr. in creating original research on the effects of changing global demographics on asset returns and economic growth. He also serves as the Chief Investment Officer of Sizemore Capital Management LLC,  a registered investment advisor.

His academic and real-life experience has given him a unique approach to investing: combining his insights into global macro trends with in-depth investor research. And he has developed a reputation for taking complex issues, recognizing long-term investment strategies, and then finding the hidden investing opportunities that he shares with investors.

Charles holds a master’s degree in Finance and Accounting from the London School of Economics in the United Kingdom and a Bachelor of Business Administration in Finance with an International Emphasis from Texas Christian University in Fort Worth, Texas, where he graduated Magna Cum Laude and as a Phi Beta Kappa scholar.

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