Income – Dividends + Emerging Mkt Debt Offers Strong Potential

Posted by John Middleton comment via Richarrd Russell

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High Conviction: Emerging Market Debt Now Offers Strong Potential

Which single asset class do you think will perform best in 2010?

We like emerging markets fixed income. We’re not convinced that global economies are as strong as equity investors appear to believe. Viewing total return as capital gains plus income, we’re expecting income to be a primary driver of total return in 2010.

Emerging markets have strong balance sheets, responsible fiscal and monetary policy and better long-term growth prospects. Of course, they’re not without risk. Many are dependent on foreign consumption, particularly on U.S. consumption, and the lack of foreign demand will weigh on their economies. However, we believe these markets still offer strong potential in 2010 with less risk than developed markets.”

… more HERE

Yields, yields, is there any decent income out there? I’ve been looking at DVY, the ETF that follows the Select Dividend Index fund. I include a description of this ETF below. The current yield on DVY, according to Big Charts is 3.64%, which is not bad, these days. The chart below is from Stock Charts and shows the action of DVY from mid-1986 to the present. According to RSI, DVY is overbought. Richard Russell Dow Theory Letters

For those who want to buy DVY, I’d suggest buying it in quarters, 25% of your total intended commitment in four sections, say a quarter every three months. (Ed Note: Canadian Dividend ETF below)


Canadian Dividend ETF below CDZ.TO (from April 08)


Brief Excerpt from Richard Russell’s Dow Theory Letters. One of the best values anywhere in the financial world at only a $300 subscription to get his DAILY report for a year. HERE to subscribe. Amongst his achievements Richard was in cash before the 2008/2009 Crash and he has been Bullish Gold since below $300 Ed Note: Richard Russell is bullish Silver and holds one of the largest single positions he has held since the 1950’s in the precious metals.



John Middleton, CFA, CAIA joined Clinton, NJ based Brighton Financial Planning in August 2008 and assumed ownership in February 2010. Prior to Brighton, John spent 7 years with the Invesco Quantitative Strategies Group as a Senior Director and Client Portfolio Manager. While with IQS, John was responsible for over 50 clients worldwide with more than $2.5 billion in assets under management.

Seeking Alpha recently had the opportunity to ask John about his current asset allocation and perspective on opportunities in this market.