During the past week, I have shared a couple of obscure sector fund ideas with you. They could pay off handsomely once the coronavirus pandemic is over.

Today, I will show you another little known fund that may also perform particularly well later this year. It may surprise you that it has nothing to do with stocks or bonds.

I have been getting a lot of questions about gold lately. Bond prices are near record highs and the stock market is on shaky ground. Investors want to know what they can do to protect their money.

I’ll admit, I have never been a fan of owning physical gold. It pays no dividends and its price tends to go nowhere over the long haul. Plus, there is the cost of storing it unless you keep it at home. In that case, it is at risk of being lost or stolen.

However, gold does come in handy when the global financial markets are in disarray as they are now. The United States went off the gold standard nearly 50 years ago. Yet, gold is still viewed as a proxy for the American dollar.

Gold is priced in dollars all over the world. For that reason, when the dollar is strong the price of gold goes down. Conversely, when the dollar is weak the price of gold goes up.

Last month, the Federal Reserve unveiled a multi-trillion-dollar stimulus plan to keep the bond markets solvent. That amount is in addition to the $2.2 trillion economic rescue plan that will put cash into the pockets of millions of American workers and business owners.

Eventually, most of that spending will work its way into the federal deficit. When that happens, the dollar could take a tumble.

Yuan and Done

At the moment, the dollar is still strong since most other major countries are in the same boat. The coronavirus does not discriminate, nor does it respect national borders.

However, not all of those countries are printing money non-stop to keep their economies afloat. China, for instance, has spent $1 trillion thus far and claims its “efficiency is 10 times that of the Fed.”

If that is all it takes for China’s central bank to get its economy back on solid footing, the dollar should weaken compared to the yuan. That hasn’t happened yet. The yuan has been trading at about a 7:1 ratio to the dollar for the past year.

Five years ago, it took only 6 yuan to buy a dollar. If the yuan were to return to that level, it would represent a 15% gain from where it is today.

I don’t suggest buying currencies for the same reason I don’t like owning gold. But you can easily participate in the yuan’s performance by owning shares of the WisdomTree Chinese Yuan Strategy Fund (CYB).

This fund’s strategy is simple: it owns U.S. Treasury bills and other cash equivalents purchased with yuan. When those bills mature, they are paid off in dollars and converted back to yuan.

Can you guess who owned nearly 15% of all the U.S. Treasury securities held by foreign countries at the start of this year? That’s right, it’s China, with more than $1 trillion worth of American debt.

China also owns a lot of physical gold in its national reserves, which just appreciated more than 30% over the past 12 months. That means China will benefit two ways if the dollar weakens, further strengthening its currency.

Also read: Emerging Markets: Will COVID-19 Tip the Dominoes?

It’s Complicated

All too often, we tend to oversimplify the financial markets into a series of binary choices. As an investor, you can choose:

• Between stocks and bonds, that
• will either go up or down in value, which
• you should either buy or sell.

In reality, the financial markets are much more complex. Sometimes, price relationships change so gradually, you don’t realize what it means until it is too late.

Which brings me back to gold. Since bottoming out in August 2018, the SPDR Gold Shares ETF (GLD) has appreciated 46%. GLD owns physical gold and other securities designed to replicate the price of gold.

After peaking in February 2019, the SPDR S&P 500 ETF Trust (SPY) fell 34% before bottoming out last month. Over the past three weeks, both funds have moved sharply higher.

The message the financial markets may be trying to send us is that the strong American dollar is about to get a lot weaker. And what investors might want instead are currencies that have not been diluted with trillions of dollars of new debt.

If all of that is a bit too esoteric for you, you may want to consider a more proven method for generating steady gains.

As chief investment strategist of Options for Income, Jim has made huge profits for his followers with his proprietary trading system.

Jim has developed a system that allows you to collect payments every Thursday, similar to a paycheck. Think of it as a “profit calendar.”

These payouts can range in value from $1,150 to $2,800, but average out to $1,692.50. Jim developed his strategy by studying the tried-and-true practices of Chicago pit traders and modifying them for use online.

It’s like getting an extra paycheck, week in and week out. The gain is so reliable, you can schedule it on your calendar. Jim made himself a wealthy man with his system. Now he wants to share his secrets with our readers.

Jim Fink makes money in rising or falling markets. How does he do it? Click here for his presentation.