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Take Your Money to Where the Jobs Are

Monday, 22 Aug 2011 08:31 AM

By Sean Hyman

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When I was a boy, I grew up in rural Arkansas. It was a place full of very nice people. Everyone knew everyone and it made it a really nice place to grow up as a kid.

However, if you were an adult, it was a different story. There wasn’t a great economy back there by any means. You pretty much had to work at the local paper mill, become an 18-wheeler driver, etc. Nothing wrong with those professions if that’s what you are passionate about.

But your selection as far as careers were concerned was very limited to say the least. There simply wasn’t an abundance of jobs in different industries in a down of 16,000 (which today is a down of 13,000).

While I love my roots and my home town and the values it instilled within me, etc., there came a day where I knew that if I really wanted to excel and pursue my passion, I was going to have to “go where the jobs were.”
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I was one of the first ones in my family to venture out of our area. I moved to places that were foreign to me like Orlando and Miami in pursuit of a better job and therefore a better quality of life.

I had many hurdles because most of my family was literally half way across the United States. Those were tough decisions for me to make in my mid- to late 20s.

However, in pursuing my passion it seemed like the whole world opened up to me. The sky seemed bluer. The flowers seemed to smell better, etc. It was just a brighter world because I’d finally “moved to where the jobs were.”

I was still the same person (same intelligence, educational background, same values, etc.) but yet my circumstances changed when I made this vital change.

Well, I’ve said all of that to say this…

In these tough times with high unemployment rates of 9 percent to 10 percent in the U.S. and Europe, it’s necessary to “take our money to where the jobs are.”

Most of the developed world is pretty banged up and beaten up right now after the recent global recession. In fact, the way things are slowing down again economically…it looks like we’re headed into another one soon.

When I was in Miami, I learned that hurricanes are horrible…but that I didn’t have to lose my life in them and that I had time to prepare for them because I could know they were coming ahead of time.

And so it is with our economy…

We know things are going from “bad to worse.” The economic data each week continues to confirm this ugly picture. So right now it’s time to board up your windows in your portfolios since we know another bad “economic hurricane” is likely coming.

Believe me, if it ends up turning into just an “economic tropical storm” instead…you’ll still be glad you prepared anyway.

Most of the people in the U.S. will simply do nothing. The storm will hit and they will watch their IRAs and 401k balances drop like a rock.

However if you know things are getting worse, you should be proactive and do something about it ahead of time.

So how do you “board up your windows” in your portfolio? You make sure that you have defensive assets built into your portfolio that will weather the storm better than most assets.

The financial assets that will weather the storm better will be the countries’ currencies that have the more favorable unemployment rates.

So we need to look at where those places are so that we can have some exposure to places in the Earth that are more fundamentally sound right now.

I believe the place to invest for the coming economic hurricane is Singapore, Switzerland and Norway. All of these countries have below 3 percent unemployment right now.

Now that’s an amazing thing in a world that is full of 9-10 percent unemployment levels (and we know the “real” numbers are far worse than that).

Singapore has an unemployment rate of 2.10 percent. Norway is 2.80 percent and Switzerland is also 2.80 percent. Now, as things worsen economically and become tougher for every country, would you rather have exposure to countries that only hav2-3 percent of their citizens unemployed or those that are starting the next round of an economic downturn at 10 percent? I’ll go with the former…and I know you would too.

So well before the economic hurricane hits, make sure you have some exposure to the Singapore dollar (SGD), Norway’s krone (NOK) and the Swiss franc (CHF).

You can even invest in the Swiss franc through your stock brokerage account via a currency ETF (symbol: FXF).
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But to gain exposure to the other currencies, you’d need a forex account (foreign exchange trading account). You can simply Google “forex broker” to find one of those.

You can start with a micro account with $1,000 to $2,000 or a mini account with something like $10,000-plus. These types of accounts will enable you to trade theses currencies through their spot forex pairings.

In the spot forex market, you could invest in the Swiss franc by shorting USD/CHF. Invest in the Singapore dollar by shorting USD/SGD. Gain exposure to the Norwegian krone by shorting USD/NOK. Start small. I’d even suggest beginning with very small micro lots. Your broker can explain more about how to do this. Most of them are available to talk to you literally 24 hours a day since the forex market runs 24 hours a day, 5.5 days a week.

Let them know that you’ve been following my articles on foreign currencies and that you’d like to begin to trade foreign currencies to protect against the slide-off of the U.S. dollar over time and to invest in places that aren’t beaten up and banged up economically as much.

By placing your money into places that “have jobs,” you’re taking a huge step in defending your overall portfolio. Will these currencies have huge swings up and down too? Absolutely! But when it’s all said and done, these countries will make it through the storm better and their economies will heal faster because they started off with more jobs (with a 2-3 percent starting point) than will other countries that start off the next recession with 9-10 percent unemployment.

So get started today, boarding up the windows in your portfolio by building in these type of fundamentally superior picks.

About the Author: Sean Hyman
Sean Hyman is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of Money Matrix Insider. Discover more by Clicking Here Now.

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