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By Scott Burns | 06-24-2009 11:43 AM

Using ETFs to Invest in the New Normal

Looking to invest for the new normal? Director of ETF Analysis Scott Burns gives 9 ETF ideas that are well positioned for an investment world characterized by slow growth, higher inflation and re-regulation.

Scott Burns: Using ETFs to Invest in the New Normal.

Hi there, I'm Scott Burns, director of ETF analysis with Morning Star. Recently, we had Bill Gross speak at our investor conference here at Chicago, and he talked a lot about the phrase "new normal." New normal is actually a term coined by his colleague Mohamed El-Erian at PIMCO, and what it really talks about is what investors can expect going forward in the next 10-20 years in the market.

Specifically, it means that we should expect the private sector will de-lever, the public sector will re-lever, and we will have re-regulation and we should expect de-globalization.

Our take on that, and what it really means for investors, is that first, you can expect lower corporate returns as companies lower their balance sheets. Second, we should expect higher inflation as the governments inflate their balance sheets. Then, government intervention and maybe even protectionism.

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