From Gary Booysen on the top floor,

Dear Money Morning Reader,

In a recent report, Marc Farber, the publisher of the Gloom, Boom & Doom report, highlighted the negative correlation between equity investment and cash deposits – especially foreign currency holdings. He claims that if the dollar falls, equities will soar. And so far he’s spot on. The greenback has slid 4.9% against a basket of six major currencies this year. The 19-commodity Reuters/Jefferies CRB Index climbed 10%.

The good news is there’s still room for you to grab a share of these runaway profits. But, it’s not quite time to cash in your unit trusts and invest directly in equities. There is still a large disparity between the performances of various market sectors. Managed funds can easily outperform certain sectors of the market. So, for now, look at unit trusts that react positively when the dollar falls.

Despite the official line taken by US authorities, Geithner and Bernanke have chucked their mandate (to protect the currency) straight out the window and will continue to depreciate their way out of trouble. The bottom line: The dollar is going to keep on falling! But which funds climb while the dollar sinks? We’ve seen the gold price rocket, but passive trackers like the New Gold ETF have underperformed thanks to the strengthening rand.

Evan Pickworth of Personal Finance Confidential believes the fund that will best take advantage of the weakening dollar is Old Mutual Mining and Resources. When compared to other funds in the same sector, it’s the best over five years and fifth best in a tight race over three years. He uses the MC Squared formula to choose his funds. This means the fund must have momentum – clearly in evidence when looking at its short-term wins – and also have the consistency shown over three and five years.

Turning to the markets...

The JSE all share index advanced 0.52% yesterday. The gold mining index traded flat, up 0.1%. Resources added 0.98%. Banks and financials weakened 0.61% and 0.11% respectively. Industrials bounced 0.33% and the platinum mining index jumped 1.48%.

London's FTSE100 shed 0.2%. The Dow Jones slipped 0.11% and the Nasdaq fell 0.48%.

Tokyo's Nikkei closed down 1.32%. Hong Kong's Hang Seng lost 0.86%.

Brent crude is currently trading at $79.12 per barrel.

Spot gold's trading at $1138.59 and platinum was last quoted at $1436.50.

And here's how the rand is performing against the major currencies:
R/$ 7.52
R/₤ 12.55
R/€ 11.19