Aussie dollars: High yields from down under

"In 2007 Australia had about 13% of world reserves of iron ore and was ranked fourth after Ukraine (19%), Russia (16%) and China (14%). In terms of contained iron, Australia has about 15% of the world's EDR and is ranked second behind Russia (19%).

"Australia produces around 16% of the world's iron ore and is ranked third behind China (32%) and Brazil (19%). While South Africa still has the world's largest reserve of gold at 6000 tons (14.3%), Australia has the second largest reserve with approximately 12% of the world's holdings.

"Japanese investors seeking higher yields in foreign bond markets, such as in Australia and New Zealand, have been brutalized in recent months, with the Aussie dollar and NZ kiwi losing roughly 45% of their value against the yen to their lowest levels this decade.

"FXA also offers a nice yield of 7.3% and also provides a nice hedge on the U.S. dollar. Though recently weak, the Aussie dollar, it may reverse course as global markets concern over the Fed printing press and inflationary pressures returns.

"From a technical perspective, the timing to begin building a position in FXA looks attractive. And we consider risk to be moderate given the depressed state of energy & commodity prices.

"For risk management purposes, we suggest that Investors use an 8% trailing stop loss. You might also wish to scale into a position at a price of $65 or lower."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.