The trend is your friend

Finweek English Edition - - INVESTMENT - SIMON BROWN

A BULL MAR­KET is de­fined (by me) as new highs for in­dices, good news cel­e­brated and bought while bad news is ig­nored and gen­er­ally pos­i­tive prospects for the econ­omy. The US f its all three and while most only really sit up and no­tice when the new highs are made, the US has been in a bull for a while.

So how does one profit from the US bull mar­ket? The eas­i­est is the Deutsche Bank ETF is­sued over the MSCI USA. This in­dex has around 600 US stocks in it and is recog­nised as a barom­e­ter of the US econ­omy. Fur- ther, it is traded lo­cally on the JSE in rand, mak­ing it easy to buy and sell.

The point about rand is im­por­tant as well, with US mar­kets look­ing stronger, I sus­pect many global as­set man­agers will no longer look to mar­kets such as ours for their yield, mean­ing less for­eign cur­rency in­flows into SA and hence the rand is less likely to strengthen much from around the R9/$ level. This fur­ther helps the DBXUS as rand weak­ness takes some shine off the re­turns.

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