Buy gold miners and international stocks to avoid political instability

Investors can profit by investing in junior gold miners and stocks with big international exposure as the hung parliament in the UK and European sovereign debt woes will together create continued market uncertainty over the coming days.

David Kempton, an experienced private investor and columnist for Citywire, said investors should expect continued instability for the pound and equity markets, with ‘terrible indecision’ as a result of both the hung parliament and the sovereign debt woes facing Greece and, increasingly, other European countries.

Kempton wrote last week for Citywire that he was sitting on the sidelines waiting for a correction. This week’s sell-off has provided that opportunity.

Buy junior gold stocks

Kempton will be buying junior gold stocks early next week. The gold price is rising, and will be a safe haven for investors, he says. Junior gold stocks are undervalued relative to their larger peers. These include:

• Extorre
• African Aura
• Vatukoula
• Centamin Egypt 
• Medusa Mining
• Adamus Resources

Investors are advised that junior gold stocks are more risky than many shares.

International exposure to avoid UK woes

UK-listed shares with large international exposure also top Kempton’s shopping list. A number of shares with only around 15-20% exposure to the UK have fallen in line with the rest of the FTSE this week.

Opportunities include Standard Chartered which focuses on emerging markets and is increasing its Chinese exposure.

Unilever also has growing exposure to emerging market consumers and has made some ‘very attractive recent disposals and acquisitions'.

Kempton also tips pharmaceutical stocks, drinks maker Diageo and insurer Aviva.