This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.
"The injections of huge amounts of liquidity into the markets worldwide will leave us all with huge inflationary pressures in the years to come," notes Steve Rawls.
In his Tipping Point Stocks, the advisor suggests, "Historically, the best place for an investor in inflationary times is gold. And ProShares Ultra Gold (NYSE: UGL) is the best way to invest in gold in 2009."
The advisor explains, "Right now, the battle being fought is to stimulate economic growth to prevent a worsening recession; whether or not this will be successful remains to be seem.
"But one thing is certain, the injections of huge amounts of liquidity into the markets worldwide will leave us all with huge inflationary pressures in the years to come.
"The pressures related to government guarantees and bailouts (and the necessary borrowing to finance them) are hidden right now because of the slowing economy, but that doesn't make them any less real.
"Right now gold is a bargain. By October 2008, gold had fallen 33% from its March 2008 high. Gold is up somewhat from those October lows, as more and more investors are worrying about: 'What comes after the recession?'
"However, investing in gold has always presented investors with a problem. Liquidity. To sell bullion, you have to go to a dealer or the local pawn shop. And neither is going to give you retail pricing.
"So how can you invest in gold, sell it as easily as a stock, and maintain the full appreciating value of your investment? Thanks to exchange-traded funds, that's easy. You can now invest in gold as easily as investing in a stock. And you don't have to buy risky mining stocks.
"At Tipping Point Stocks, our gold ETF of choice is the ProShares Ultra Gold. This ETF seeks to replicate twice the performance of gold based on the London PM gold fix. We also like UGL because it is an ETF, not an ETN. An ETN would involve a credit risk as well as a market risk.
"We seek out stocks that are not only good, strong investments, but are also at the point where the market in general is recognizing them. In other words, we find the right stock at the right time. Right now, the time is right for gold. And UGL is the best way to invest in gold in 2009."
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