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The Bernanke Asset Bubble Has Finally Gone Global

By Dr. Steve Sjuggerud
Thursday, October 18, 2012

It was only a matter of time... We knew it would happen eventually.
 
That day is finally here. The Bernanke Asset Bubble has gone global.
 
At first, the Bernanke Asset Bubble was mostly a U.S. thing...
 
But as of October 1, our True Wealth Systems computers tell us it's time to get our heads (and our money) outside the U.S... "Bernanke Fever" is apparently contagious. It has caught on around the globe. And there's an easy 25% trade to make today.
 
Let me explain...
 
I've been talking about this Bernanke Asset Bubble for a while now... I believe Federal Reserve Chairman Ben Bernanke will create bubbles in many different assets by keeping interest rates lower than anyone can imagine, for longer than anyone can imagine.
 
That's why I've been telling you to buy gold, real estate, and U.S. stocks. Now, our True Wealth Systems computers say it's time to buy emerging markets as well.
 
This is fantastic news... It gives us a way to get in early in yet another asset that will rise in the Bernanke Asset Bubble.
 
Unlike U.S. stocks or gold, emerging market stocks haven't run up that much yet. They are still a great value. And as of October 1, they're officially in an uptrend. Take a look...
 
Emerging Markets Have Returned Nearly 19% a Year In This System
 
Our system is in "buy" mode when the chart is green. Based on history, emerging markets return nearly 19% a year when our system says buy, like it does today.
 
Importantly, emerging markets aren't just in a new uptrend today. They are also cheap and hated...
 
As I write, emerging markets pay around a 3% dividend yield. That's a near-record-high level... which means these stocks are near-record-cheap.
 
But nobody is paying attention... Most American investors have given up on emerging-market stocks. Instead of buying them, they've been pulling their money out...
 
The chart below shows what I mean. It shows the shares outstanding of the iShares MSCI Emerging Markets Fund (NYSE: EEM)...
 
When the number of shares outstanding is growing, more and more people are buying these investments. But when the number of shares outstanding is shrinking – as the chart below indicates – more and more people are getting out of emerging markets.
 
Major Emerging Market Fund EEM Down 15% in Two Years
 
To me, this is a clear sign that emerging markets are hated by most American investors. That tells me there's plenty of room on the upside.
 
When you put it all together, emerging markets are exactly what I look for in an investment...
 
Our True Wealth Systems indicator says the new uptrend is here. The investment world has forgotten about the stocks. And based on near-record dividend yields, emerging markets are cheap.
 
You can easily make this trade with EEM. This is a simple fund that holds hundreds of emerging market companies.
 
Today, the Bernanke Asset Bubble has gone global. The uptrend in emerging markets is here... We need to get onboard.
 
Based on history, we could easily see 25%-plus returns by simply buying EEM today and holding for 12-18 months.
 
Good investing, 
 
Steve Sjuggerud




Further Reading:

Get more trades from the True Wealth Systems computers here...  
 
These stocks are cheap... hated... and have entered a new uptrend.
 
"With extraordinary growth comes extraordinary investment returns... if you buy at the right time."

Market Notes


A BIG WIN FOR STEVE'S TRUE WEALTH READERS

Steve's homebuilding trade is benefiting from one of the biggest rallies in its history…  
 
More than a year ago, Steve told his True Wealth readers to buy the iShares Dow Jones U.S. Home Construction Fund (NYSE: ITB) – an exchange-traded fund that holds many big homebuilder stocks as well as some housing-related companies like Home Depot. What followed is a remarkable demonstration of how you can quickly make big money when things go from "bad to less bad"...  
 
When things are "bad," assets get so depressed and cheap, it only takes "less bad" conditions to produce huge rallies. That's been the case with homebuilders recently. The housing market has bottomed... and demand is picking up a little. Many homebuilders have doubled and tripled in price off their 2011 lows. ITB is hitting new four-year highs.
 
Steve's readers got in just before the ultimate bottom. They are up 53% in about 20 months, a big win. You can see the win below, in the two-year chart of ITB.
 
– Brian Hunt
 
A Big Rally for Homebuilders on the Two-Year Chart

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