Market Watch reporter Stacey Delo interviewed Kensington Investment Group CIO and president John Kramer to get his thoughts on putting cash to work in a post-Lehman world.
- Start looking now to get back into the market while the storm clouds are still upon us
- Dividend paying stocks will be popular as the population ages and fixed income products fall short of meeting retirement savings and income needs
- Look for dividend paying companies with solid business models – ensure that they generate enough cash to cover the dividend
- Look at the hard asset sector, specifically, commercial real estate and infrastructure companies
- You will know the level of risk is coming down in the market when the credit spread between what companies pay and the government pays begins to narrow
Commercial real estate ETFs include the DJ Wilshire REIT ETF (RWR) which holds commercial real estate REITs and rebalances monthly. The FTSE NAREIT Industrial/Office Index Fund (FIO) specializes in industrial and office REITs.
For a more complete look at REITs, see Investing in REITs with ETFs.
For infrastructure ETFs, check out SPDR FTSE-Macquarie Global Infrastructure 100 ETF (GII) which owns 255 stocks in Pipelines, Transportation Services, Electricity, Gas Distribution, Multi-utilities, Water and Telecommunications Equipment.
Also look at the S&P Global Infrastructure Index Fund (IGF) which tracks performance of the stocks of large infrastructure companies around the world.