[MRM]

Stay out of the emerging markets. They are a bubble that is about to pop. Don't get too fancy or creative. Follow the broad trends of the market.

Commodities are going crazy because world-wide industrial demand is driving their prices and not just speculation of people who think all world currencies are about to default. Oil and mining companies, including processing and transportation, are poised to do well. Picking the orchid out of the coal mine of those stocks is the trick. I don't know anything about that, but Sammy does. I'm thinking his stock tips in this environment are likely to be pretty good. But in general you know that commodities prices are rising and will rise higher, so if you can find a stock the increases in value as commodities rise, you're in.

Same with financials. They are slowly getting back into the game and are enjoying new fees and higher rates. Lots of banks have had pretty good runs lately. Looking at well managed banks that have been beaten up is a good strategy. I saw a nice write-up on Wells Fargo, but I didn't buy any. Citibank is an interesting stock. With the government divesting its shares, the price should be firming up and they could be poised to go higher.

Otherwise, just buy an S&P 500 index fund. The S&P was up something like 3.5% in January. That's better than T Bonds pay for the year. As inflation comes, the stock market will have to inflate with it. Interest rates will rise, which will take some investment out of the stick market, but it will still rise during inflationary times.

The long term strategy right now is to be broadly invested in US stocks, preferably in an index fund. Wait until inflation hits and the Fed starts raising rates. Just as rates hit the peak and start coming down and inflation is on its way to being tamed, pull everything out of the stock market and build a ladder off T Bonds.

Think 1992 and 9.5% on the 30 year T Bond. That's what's going to happen again. When it does, I'm going to sell every stock I own and go long on bonds. I won't need Bernie Madoff to guaranty regular returns on my investments then.