Morningstar Advisor - April/May 2010 - 41

currencies and don’t have the option of inflating their way out of debt. Japan, the U.K., and the United States, on the other hand, can devalue their currencies and avoid default. But such a strategy brings a host of other problems, particularly for those who hold assets denominated in those countries’ currencies. In the case of devaluation, there could be an exodus out of those currencies, further exacerbating the impact of devaluation.
What investors can do: Consider global bond

capital expenditures boost demand for U.S. manufacturing.
What investors can do: Buy industrials or

About Our Contributors
Philip Guziec, CFA, a derivatives investing strategist with Morningstar, is portfolio manager and editor of Morningstar OptionInvestor research service. Erik Kobayashi-Solomon is a senior options analyst. Information about OptionInvestor is available at http://option. morningstar.com. As editor of Morningstar StockInvestor, equities strategist Paul Larson manages the publication’s two model portfolios— the Tortoise and the Hare. Information about StockInvestor is available at http://msi. morningstar.com. Paul Justice, CFA, is associate director of ETF Research and a strategist for Morningstar ETFInvestor, a newsletter that runs two model ETF portfolios—Hands-Free and Hands-On. Bradley Kay, who contributes to ETFInvestor, is associate director of international ETF research. Information about ETFInvestor is available at http://etf.morningstar.com.

industrials ETF, such as Industrials Select SPDR XLI. Also, consider innovative manufacturing suppliers, such as Fastenal FAST, 3M MMM, and Illinois Tool Works ITW.
Unconventional approach: Buy companies that benefit from rising employment, such as Automatic Data Processing ADP, Paychex PAY, and Cintas CTAS.

funds that do not have much exposure to countries mentioned above, such as Templeton Global Bond TPINX and PIMCO Global Advantage Strategy PSAIX.
Unconventional approach: Buy foreigncurrency CDs. EverBank sells CDs for individual currencies and baskets.

Consistent Market Volatility
How it could happen: Economic uncertainty

keeps investors jittery, as investors ignore fundamentals and overreact to positive and negative news.

New Trade Barriers
How it could happen: Countries seeking to

What investors can do: Buy buy-write indexes, such as PowerShares S&P 500 BuyWrite PBP. Unconventional approach: Sell cash-secured

guard their home markets during the downturn take protectionist measures, restricting trade and setting off disputes.
What investors can do: Buy domestic-focused

lives, demand will rebound. When it does, production levels will need to almost triple to catch up to historical levels.
What investors can do: Buy homebuilders,

put options on individual names, focusing on undervalued companies with high volatility; then, when assigned, sell the call options.

companies that compete with imports, such as Ford F, or U.S.-based light manufacturing, such as apparel.
Unconventional approach: Short transport firms that enable the flat world, such as railroads and United Parcel Service UPS.

building-goods suppliers, lenders, mortgage insurers, and REITs. Also, consider consumer discretionary names (because the home-equity ATM would reopen).
Unconventional approach: Buy options on

Real Estate Market Rebounds Rebounding U.S. Manufacturing
How it could happen: Economic growth in the How it could happen: Natural demand. Since the financial crisis, housing has operated well below long-term replacement demand. Unless America permanently alters the way it

financial services ETFs. If the real estate market heats up again, it’s likely that the people financing the boom will be very leveraged to the recovery. K

rest of world and rising infrastructure and

MorningstarAdvisor.com 41


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Morningstar Advisor - April/May 2010

Table of Contents for the Digital Edition of Morningstar Advisor - April/May 2010

Morningstar Advisor - April/May 2010
Contents
New On MorningstarAdvisor.com
Contributors
Letter from the Editor
Our Job: Building Better Investors
What’s Your Biggest Long-term Concern for the Economy?
An Early Start
Women’s Work
Investment Briefs
Markowitz 2.0
Asset Allocation Is King
A Decade of Riskier Assets ...
... but with plenty of Silver Linings
Be Prepared
Facing up to the Economy’s Problems
Levelheaded
Surviving on Conviction
Four Picks for the Present
Pharmaceutical Firms Get the Urge to Merge
Funds That Look Cheaper Than the Market
Finding Dividend Leaders
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks with Wide Moats
VAs: Assets Rise as New Sales Slip
New at Morningstar
When You Wish Upon a Star
Morningstar Advisor - April/May 2010 - Morningstar Advisor - April/May 2010
Morningstar Advisor - April/May 2010 - Cover2
Morningstar Advisor - April/May 2010 - 1
Morningstar Advisor - April/May 2010 - 2
Morningstar Advisor - April/May 2010 - Contents
Morningstar Advisor - April/May 2010 - 4
Morningstar Advisor - April/May 2010 - 5
Morningstar Advisor - April/May 2010 - New On MorningstarAdvisor.com
Morningstar Advisor - April/May 2010 - 7
Morningstar Advisor - April/May 2010 - Contributors
Morningstar Advisor - April/May 2010 - Letter from the Editor
Morningstar Advisor - April/May 2010 - 10
Morningstar Advisor - April/May 2010 - Our Job: Building Better Investors
Morningstar Advisor - April/May 2010 - 12
Morningstar Advisor - April/May 2010 - 13
Morningstar Advisor - April/May 2010 - What’s Your Biggest Long-term Concern for the Economy?
Morningstar Advisor - April/May 2010 - 15
Morningstar Advisor - April/May 2010 - An Early Start
Morningstar Advisor - April/May 2010 - 17
Morningstar Advisor - April/May 2010 - Women’s Work
Morningstar Advisor - April/May 2010 - 19
Morningstar Advisor - April/May 2010 - Investment Briefs
Morningstar Advisor - April/May 2010 - 21
Morningstar Advisor - April/May 2010 - Markowitz 2.0
Morningstar Advisor - April/May 2010 - 23
Morningstar Advisor - April/May 2010 - 24
Morningstar Advisor - April/May 2010 - 25
Morningstar Advisor - April/May 2010 - 26
Morningstar Advisor - April/May 2010 - 27
Morningstar Advisor - April/May 2010 - Asset Allocation Is King
Morningstar Advisor - April/May 2010 - 29
Morningstar Advisor - April/May 2010 - 30
Morningstar Advisor - April/May 2010 - 31
Morningstar Advisor - April/May 2010 - 32
Morningstar Advisor - April/May 2010 - 33
Morningstar Advisor - April/May 2010 - A Decade of Riskier Assets ...
Morningstar Advisor - April/May 2010 - ... but with plenty of Silver Linings
Morningstar Advisor - April/May 2010 - 36
Morningstar Advisor - April/May 2010 - Be Prepared
Morningstar Advisor - April/May 2010 - 38
Morningstar Advisor - April/May 2010 - 39
Morningstar Advisor - April/May 2010 - 40
Morningstar Advisor - April/May 2010 - 41
Morningstar Advisor - April/May 2010 - 42
Morningstar Advisor - April/May 2010 - 43
Morningstar Advisor - April/May 2010 - Facing up to the Economy’s Problems
Morningstar Advisor - April/May 2010 - 45
Morningstar Advisor - April/May 2010 - 46
Morningstar Advisor - April/May 2010 - 47
Morningstar Advisor - April/May 2010 - 48
Morningstar Advisor - April/May 2010 - 49
Morningstar Advisor - April/May 2010 - Levelheaded
Morningstar Advisor - April/May 2010 - 51
Morningstar Advisor - April/May 2010 - 52
Morningstar Advisor - April/May 2010 - 53
Morningstar Advisor - April/May 2010 - Surviving on Conviction
Morningstar Advisor - April/May 2010 - 55
Morningstar Advisor - April/May 2010 - 56
Morningstar Advisor - April/May 2010 - 57
Morningstar Advisor - April/May 2010 - Four Picks for the Present
Morningstar Advisor - April/May 2010 - 59
Morningstar Advisor - April/May 2010 - 60
Morningstar Advisor - April/May 2010 - Pharmaceutical Firms Get the Urge to Merge
Morningstar Advisor - April/May 2010 - 62
Morningstar Advisor - April/May 2010 - 63
Morningstar Advisor - April/May 2010 - Funds That Look Cheaper Than the Market
Morningstar Advisor - April/May 2010 - 65
Morningstar Advisor - April/May 2010 - Finding Dividend Leaders
Morningstar Advisor - April/May 2010 - 67
Morningstar Advisor - April/May 2010 - Mutual Fund Analyst Picks
Morningstar Advisor - April/May 2010 - 69
Morningstar Advisor - April/May 2010 - 70
Morningstar Advisor - April/May 2010 - 71
Morningstar Advisor - April/May 2010 - 50 Most Popular ETFs
Morningstar Advisor - April/May 2010 - 73
Morningstar Advisor - April/May 2010 - Undervalued Stocks with Wide Moats
Morningstar Advisor - April/May 2010 - 75
Morningstar Advisor - April/May 2010 - VAs: Assets Rise as New Sales Slip
Morningstar Advisor - April/May 2010 - 77
Morningstar Advisor - April/May 2010 - 78
Morningstar Advisor - April/May 2010 - New at Morningstar
Morningstar Advisor - April/May 2010 - When You Wish Upon a Star
Morningstar Advisor - April/May 2010 - Cover3
Morningstar Advisor - April/May 2010 - Cover4
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