El-Erian's Advice

Noted investment officer Mohamed El-Erian of Pimco has been giving advice for the current situation.The crisis is far from over,he feels.The reality is that it is morphing again.Now it's the real economy that's in play.The good news is,that's something that we know about.The Federal Reserve's dual objectives of fighting inflation and fostering growth will become increasingly inconsistent.He expects the Fed to stop lowering rates and see what's going on.Investors should be more cautious about areas connected to the consumer.As a long term proposition,you want to have inflation protection.Treasury inflation-protected securities are a way to do that.The Fed has made a huge effort,but it's too little too late.Look beyond the U.S..There are other areas of the world not as threatened.Focus on high quality assets.We tend to be comfortable with home investments,with what we're familiar with.Use diversified instruments to get foreign exposure,Mr.El-Erian counseled.The iShares Lehman Brothers TIPS fund(TIP) provides income from inflation-protected securities.