Dear Fellow Investor,

It was another rough day on the Street -- with the Dow dropping more than 250 points and falling to a new low for 2008. It's been anything but an easy year for investors.

Year to date, the U.S.'s S&P 500 is down 10%; Hong Kong's Hang Seng index lost 19%; Japan's Nikkei index dropped 10%; Australia's benchmark index lost 15%; and India's stock market is down 30%. And Chinese stocks listed overseas have sold off 25%.

Much of the cause for the volatility this year can be attributed to record energy and grain prices, further credit market deterioration, and stagnating global economic growth.

And during rough times like these, some investors would prefer to stick their heads in and the sand and wait for all of the gloom and doom to go away. But I am an optimist. And I believe that there are opportunities to make money in any market environment – even the current one.

Global Market Sell-Off

But to profit in a tough environment you first must understand what is contributing to the global market sell-off. Right now, I would say that the three main causes include: 1) Sky-high energy prices; 2) China's tight monetary policy; and 3) The continuing credit crisis.

Global Investors -- You Must Read This!

You already know that investing in China is one of the most profitable trends in investing today. But what about the substantial economic growth taking place in other emerging markets around the globe? Emerging market GDP is expected to grow at almost 8% in 2008 -- compare that with the measly 2.1% that is expected in the U.S. and other developed countries, and you can see where the true opportunities lie. Interested in learning more about how to profit from the fastest-growing, highest-potential emerging markets in the world? Then Jeff Manera's G3 Global Investor is right for you. In this FREE weekly e-letter, Jeff digs through the murky waters of investing in emerging markets, and identifies high potential option trades in fundamentally sound companies worldwide. And even better -- it's all FREE!! Learn more about Jeff's G3 Global Investor and how to grow your wealth 50% in 90 days!

Record-High Energy Prices: Crude oil per barrel leapt to $138 today and has stayed above $135 per barrel over the past two weeks. And don't expect it to fall anytime soon either -- OPEC's president said today that oil could rise between $150 and $170 per barrel this summer! Limited oil supplies and increasing demand from Asia have greatly contributed to the 40% increase in crude oil prices this year. And I don't expect oil prices to top out and fall off until sometime next summer.

Chinese Stock Market Correction: With oil and other commodity prices on the rise, Beijing has made it very clear that its number one goal is to combat inflation. To keep inflation under control, the Chinese central bank hiked interest rates and raised reserve requirement repeatedly in the past year. But this policy contributed to the deflation of the highly speculative Mainland Chinese stock market -- it's dropped 60% since its peak in October. And Chinese stocks listed in Hong Kong and New York have sold off 45% from their highs.

I've been telling my China Strategy subscribers that this was inevitable. Chinese stocks moved too high, much too fast, so a sharp correction was inline. Plus, even though liquidity and earnings growth are favorable for overseas-listed Chinese stocks, the big run-up in the market last year made these stocks vulnerable to collateral damage from the volatility in the U.S. and Mainland China stock markets.

Continuing Credit Crisis: Banks and brokerage firms are still reporting more bad debt write-offs and sharply weaker earnings. Currently, banks and brokerage firms have booked over $400 billion in write-offs and losses from credit market problems. These firms have also raised over $300 billion in new capital to counter the bad write-offs. But the sub-prime crisis and credit crunch is affecting financial institutions all over the world, and the problems are lasting much longer than many had anticipated. The credit crisis may extend well into 2009. I, personally, don't think we'll see a rally in financial stocks until next year.

What to Do Now

While the current market and economic problems are dragging down global stock markets, there are still profitable opportunities. You just need to know where to look and be more selective in the stocks you buy. The right strategy and adapting to market conditions are two of the key ways to making money in a tough investing environment.

Just this week, I advised my China Strategy subscribers to load up on five of our current holdings that have held up exceptionally well in recent months. These are precisely the types of companies that you should be loading up on during market pull backs.

For example in the past three months, China's Google is up an eye-popping 41%; China's leading medical device manufacturer is up a whopping 36%; and China's leading offshore oil drilling company is up a respectable 25%. And that's just my top three picks right now!

To learn more about these three companies that are beating the odds and defying the global market sell-off and for my advice on the stocks that I'm recommending China Strategy subscribers load up on right now, join me on this remarkable journey today.

Robert Hsu