There is some light at the end of the tunnel for investors despite a rising tide of economic troubles.

That is the view of Bermuda Investment Advisory Services (BIAS) as revealed at its second-quarter 2008 market briefing.

BIAS highlighted a number of issues including falling house prices across the US, the UK and parts of Europe, $380 billion in credit market write-downs following the sub-prime mortgage crisis, a slowing US economy, the instability of financial institutions such as Bear Stearns and oil reaching an all-time high at $129 per barrel as the cause of the current economic woes.

The US dollar slumping to record lows and a dramatic rise in food and gas prices only added to these problems.

But the investment specialists pointed to a fiscal and monetary stimulus with the US Federal Reserve cutting rates by 3.25 percent to two percent and $168 billion being handed out in tax refunds as reasons for some optimism. In addition, the lower dollar is boosting US exports, the emerging economies are maintaining their strength, banks and brokers are raising new capital and credit risk perceptions are declining.

From all of this chaos arose several opportunities to cash in on the situation, BIAS said, as US multinationals became positioned to outperform, with strong foreign exchange gains, financial stocks were beaten up and in some cases undervalued, energy infrastructure plays were overlooked, technology companies started to benefit from the upgrade cycle and a growing demand for basic needs by emerging economies.

As a result of these factors, BIAS reported it had made numerous strategic shifts, with an increased equity exposure up from 47 percent to 52 percent, a rise in financial sector investment from 10 percent to 15 percent and a new three-percent position in a diversified basket of pipeline companies, which offer good fundamentals that are set to improve, a high yield and quality at a good price and growing distributions.

It also recommended increasing investments in technology from three percent to 14 percent and agriculture from two percent up to five percent, while reducing the cash side of its portfolio from nine percent down to four percent.