How to Get Rich with Day Trading?

We often hear that rich gets richer and poor gets poorer. It's very true particularly now. Warren Buffett, the richest man in the world said that the financial crisis were "far from over." We hear more pessimistic outlook for the future from media and financial advisors. However, Warren Buffett doesn't need any more money no matter what happens with our economy, he still stays rich and enjoys being rich.

How to get rich with day trading?
The question is, how an average joe with a little bit of money can invest profitably when uncertainty continues to overwhelm the market? According to Forbes, the Dow, the Nasdaq and the S&P are all down more than 14% so far. Even foreign market doesn't look great. The EAFE stock market index is down 16%, the SPDR S&P World Index is down 13% and even Japanese market is down over the U.S. credit crisis.

However, there is a better way to approach the market.

Exchange Traded Funds or ETFs
According to Carl Delfeld, the managing director of the global asset management firm, ETFs are cheaper, more liquid and more tax efficient than mutual funds. There are hundreds of them and trading them is a snap with any discount broker.

Carl believes in taking a global perspective and using ETFs as a core investment tool. He has recently been investing in beaten down overseas markets that he says are just beginning to turn around. Markets such as Hong Kong, Brazil, Japan and even Ireland, which is currently one of the most inexpensive markets in the world.

There are many opportunities in other countries of the world. Carl likes France (EWQ) which is starting to go through its own "Reagan Revolution" under President Sarkozy. In addition, he says the Netherlands (EWN) is dirt cheap and is trading at just six times earnings due to its heavy exposure to the financial sector. Here in the U.S., there are sectors where Carl says ETFs have huge opportunities, such as in Healthcare and Financials.

7 ways you can profit from ETFs
1. ETFs are a tax-advantaged investment: you are not tagged with the big capital gains distributions when your fellow investors sell shares, because the underlying stocks in the ETF are traded, not sold. You don’t pay taxes until you sell your shares.

2. Annual management fees and expenses are extremely modest compared to most mutual funds. There are no 12-b-1 fees, sales loads, or exit charges. And no minimum investment required.

3. You can trade ETFs with stop-loss orders, sharply limiting your downside risk. To make sure you don’t pay more than you want for shares, you can use limit orders, just as you would for a stock.

4. You can purchase ETFs on margin, enabling you to leverage your investment for huge gains.

5. There are almost 800 ETFs trading on U.S. exchanges and 1,200 globally, enabling you to trade virtually any index in the world, from the NASDAQ and the Malaysian stock market, to microcap and Chinese stocks.

6. ETFs can be sold short, even during a market rout, to profit from falling stocks. Unlike individual stocks, ETFs are exempt from the uptick rule.

7. Unlike mutual funds, which trade at end-of-day prices, ETFs can be bought and sold instantaneously on major stock exchanges all day long, giving you tighter control of your entry and exit prices.

Here is S&P/Citigroup Data, 7/1/2008.

• Brazil: Price/cash flow 6.2%, Price/earnings 16.3%, ROE 14.4%
• India: Price/cash flow 11.94%, Price/earnings 16.2%, ROE 21.1%
• China: Price/cash flow 10.4%, Price/earnings 17.0%, ROE 16.1%
• Russia: Price/cash flow 13.0%, Price/earnings 14.0%, ROE 17.3%
• World: Price/cash flow 8.1%, Price/earnings 13.6%, ROE 14.7%

Among Carl's 2007 winning picks:
iShares MSCI Brazil (EWZ), up 75%
Indonesia Fund (IF), up 51%
iShares MSCI Hong Kong (EWH), up 37%
iShares MSCI Germany (EWG), up 33%

Here is Carl's advice.

It's to be careful! You can't just invest blinldly-even in thriving markets. You have to do a rigorous valuation of these countries, know ehich are best positioned, understand where the momentum is and make sure you buy at the best entry point.

It's also important to know the politics of the countries you invest in and where the big global fund managers are placingtheir bets. What will be the catalyst to drive an ETF and what are the prospects for a country's currency?

Don't make the mistake of turning to actively managed mutual funds either. They charge high fees because they spend an enormous amount of money on stock research.

By comparison, ETFs, like index mutual funds, can keep costs low because they typically track market benchmarks.

Here are his books on global ETF investing: