Friday, February 18, 2011

Turmoil in Egypt and Middle East - chance to invest?

There are several ways you can invest in the Middle East without having to leave your house.

First, let's talk about Egypt. It's the gate keeper of the Suez Canal and all of the economic activity that passes through there they take a piece of the pie. Not to mention its energy reserves and tourism dollars -- which recently have been hit by the turmoil behind non-violent protests for Mubarak's removal. Now that it has some decent stability with the military promising democratic elections within six months, investors should take a look at NYSE: EGPT as a potential investment now.

A much older and more "aged" choice is the Middle East's premier ETF which is NYSE: GULF. Like the Egyptian ETF, it continues to be challenged with recent protests and negative news in the region. Yet the truth of the matter is, most of the allocation for GULF is based in Qatar, Kuwait, UAE, and other players that are "more stable" than the rest of the countries. The focus on telecommunications in these emerging countries also is a different strategy than solely depending on energy.

At the end of the day, the question whether to invest is your belief on whether the Middle East will get back to "normal". If your position is long term, it looks like it will. If your position is short term, your money will not be earning anything for a while.