How to invest in a zigzag economy?

Are you in the right sectors of the stock market for this point in the economic recovery? Solid data stretching back to 1945 show that certain industries and sectors outperform during specific stages of any economic recovery.

No argument from me on that. I think investors should do everything they can to put the power of the economic cycle behind their portfolios.

What is the economic cycle?

Just a couple of questions, though: Where exactly are we in the economic cycle? And in the new global economy, does it still make sense to think about over- or underweighting sectors, just on the basis of where the U.S. stands in the economic cycle?

My answers to those questions are complicated (and take up the rest of this column). The short response is that the U.S. economy is in the early recovery stage of the economic cycle. That means you should be overweighting the sectors that do best in that stage: basic materials, as well as industrials near the beginning of this stage and energy near the end.

But my best estimate is that the global economy is further along in the recovery cycle, and that this is especially true for emerging economies. I think the global economy has made the transition from early to late-stage recovery. That means that for foreign stock holdings (and for U.S. companies that rely on sales in the developing world for growth), you should be overweighting those sectors that do best in the late stage of the recovery cycle. Energy typically does well in this stage, and, near the end of the stage, consumer staples and services also tend to prosper.

Confused yet? Let me explain now in more depth and lay out a way for you to position your portfolio for this unique moment in the global economic cycle. I'll end by suggesting a few stocks that I think fit our rather complicated picture.
A primer on the economic cycle

The best work on this subject comes from Sam Stovall, the chief investment strategist for Standard & Poor's Equity Research. His 1996 book, "Sector Investing," is still the best resource on the subject.

Stovall divides the economic cycle into four stages:

Early recession. You should remember this stage vividly. Consumer sentiment ranges from fear to terror. Industrial production plunges, interest rates peak and then start to fall, and unemployment begins to rise rapidly. Sectors that have done well -- relatively, at least -- during this stage include services (near the beginning), utilities, and (near the end of the stage) cyclicals and transportation stocks.
Full recession. Gross domestic product tumbles, interest rates keep falling, and unemployment rises. Sectors that do best during this stage historically have been cyclicals and transportation. Technology performs well at the beginning of the stage; industrials benefit near the end.
Early recovery. Consumer sentiment improves, industrial production turns up, interest rates hit bottom, and unemployment peaks and starts to move lower. Sectors that do best are usually industrials (near the beginning of this stage), basic materials and energy (near the end).
Late recovery. Interest rates rise as the central bank tries to control inflation, consumer sentiment heads down, and industrial production is flat. Sectors that have done well in this stage include energy and, (near the end of the stage) consumer staples and services.
Is the recovery real?

In 2009, it seemed we were well along the path to recovery. The economy had bottomed in the second quarter with U.S. GDP contracting by 0.7%. The economy then grew by 1.6% in the third quarter and by a huge 5% in the fourth quarter.

The recovery was off and running. In January 2010, I wrote that we were in the early recovery stage of the economic cycle.

And then the economy double-crossed us. In 2010, GDP growth dropped to 3.7% in the first quarter and to 1.7% in the second quarter.

1.7%? Wasn't that just about the 1.6% growth investors had seen back in the third quarter of 2009?

No wonder lots of economists and investors started to worry that we were headed to a double-dip recession -- and that the next quarter would show a drop back to something like the negative 0.7% growth of the second quarter of 2009. But luckily, the economy decided that it had at least one more zigzag up its sleeve. Economic growth accelerated to 2.6% in the third quarter of 2010 and now economists are expecting 3.5% growth for the fourth quarter of 2010.

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Gold as an investment : Tips & Strategies

There will be no objection if i say that gold is one of the most sought after metals in the world. Such as gold and metal, which is due to its market value, investment. A number of empires and nations of this shiny piece of metal that has been fought for a long time.

A closer view of your portfolio invested in gold is the best way to start. If you invest in gold is not recommended to put your money at all, but you can also consider a number of other investment options. It is always useful for any new investor with a diversified investment portfolio. You should consider all options for buying gold.

Gold Investment for Beginners

Once the effects of the economic downturn we have seen on all our lives, homes, markets, and what is not lost. At the time of their investment is safe in the hands of the people who are trying to save people time. There is a safe investment, rather than invest in gold than others. Precious metals such as gold and silver as an investment in its portfolio an investor should be at least 25%.

Physical Gold
The first choice for beginner's guide to investing in physical gold, gold. Gold traders, gold stores, bars and gold coins can be purchased from private dealers, etc.

Gold Mutual Funds
Another great option is gold and gold mutual funds invest in is putting their money. When you sleep, but the various owners of physical gold by investing in gold mutual funds, not as the owner of the points. Funds such as mutual funds, gold mining and gold stocks ETF trading securities consist of various investments.

Gold Jewelry
If you have some historical relevance of jewelry to purchase, where a great design and very good condition, market rates may be very large. This means that gold prices will need to sleep more than ever, there are now skyrocketing.

Gold Mining Stocks
To invest in gold without actually buying the real thing, some another way to buy gold mining stocks. This investment is very volatile.

Now the question I should be investing in gold, arose? I can not say why.