How to profit from the sovereign debt crisis

Skidding currencies, plunging stock markets, soaring government bond yields -- if the type of debt crisis that just hit Greece heads to U.S. or other shores, investors may think the safest place for their savings is the mattress.

Yet plenty of strategists say there's a way to make money off the next phase of the sovereign debt crisis.

Strategies range from the obvious -- trimming holdings of long-term U.S. Treasurys and buying gold -- to the esoteric -- buying Brazilian reals while shorting the Czech koruna.

But the concept behind all of the approaches is that the current turmoil will last a long time.For the debt crisis, "we're in the middle innings of that game," said Max Bublitz, chief investment strategist at SCM Advisors.

Investors should prepare to wait and perhaps suffer some pain along the way, money managers say. Many suspect the U.S. economy could suffer low growth and bouts with deflation before high debt levels give rise to an upturn in interest rates.

"If you put these trades on, you have to be in it for the long term," added Russ Koesterich, head of investment strategy for scientific equities at BlackRock.

Seven mistakes fund investors make most

There's a difference between trying to do the right thing and actually getting it done. The biggest mistakes mutual-fund investors make fall right in the middle, where an investor trips over the fine line that separates good investing tactics from bad ones.

In talking to financial experts and fund specialists, as well as reviewing industry statistics about ownership and asset flows, it's clear that the investing public keeps trying to do the right thing, it just doesn't always get the best results.

Here are the biggest mistakes fund investors make. If they describe the way you have been investing, it might be time to check your portfolio and your mindset:

The 7 fund stats that mislead investors the most

My friend Keith works for a big mutual fund company and assumes I hate mutual funds because, he says, I "always write about the things we do wrong."


He insists that fund companies don't actually do much wrong, because they follow the rules and regulations and they'd get in trouble if they violated those standards.

While he's right from a legal standpoint, Keith ignores the simple truth that the rules leave fund companies a lot of ways to fudge the statistics, and the meaning of the numbers. What's more, industry practices let fund companies and research firms hype red herrings, information that's attractive but not necessarily meaty and important.

In our recent discussion, I laid out for Keith what I considered the most misleading statistics and data in the fund world. The longer the conversation ran on, the more I realized that most fund investors don't necessarily know how this information can be used against them.
If these points factor into your investment decisions, you may want to look more closely at their meaning:

How to invest in gold

HISTORICALLY, gold is perceived to be a safe haven during uncertainties and economic crises as it is considered more stable than other asset classes. It is generally an effective hedge against inflation and fluctuations in the US dollars.

Gold is an investment tool for preservation of wealth and a store of value in times of market volatility. It is an asset diversifier that could lower the overall risk in an investment portfolio.

In the previous article, we discussed the benefits of investing in precious metals and particularly gold. This article will focus on different ways to invest in gold.