Sometimes, the best and most rewarding investments are not company specific, but instead bet on changes in sentiment or the macro economy. Look no further than John Paulson, who in 2007 made a big bet that housing prices would revert back to the mean. He did so by buying insurance on loan defaults via credit default swaps. When the housing market tanked, Paulson made billions in profit. (For related reading, see Taking Global Macro Trends To The Bank.)

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A Very Clear Picture
Investors may think it's easier to get away with macro-specific bets. That assertion couldn't be further from the truth. When deciding to make a bet such as Paulson did back in 2007, you had better be supremely confident in your analysis and reasoning. And once your data and reasoning say you are right, be prepared to stomach the short-term volatility that may occur. The reward, of course, is a potential big payoff when your thesis plays out.

Some Bold Bets
Despite the rise in price, a lot of smart money is betting on gold to go higher. The basic thesis is that gold is a play on uncertainty and monetary instability. Since central banks the world over are expanding the monetary base at a never-before seen pace, gold is a big bet against monetary stability. You can own gold simply by holding SPDR Gold Shares (NYSE: GLD), an ETF that buys gold bullion. Or you can make a more leveraged bet by owning shares in gold mining businesses, with the Market Vectors Gold Miners ETF (NYSE: GDX) being an excellent choice. The single most important variable affecting the share prices of these two ETFs is the price of gold. (For more, see 8 Reasons To Own Gold.)

Another bet might be that natural gas prices may be ready to climb once again. Natural gas has not performed as well as oil this year, and for good reason. Natural gas supplies continue to rise steadily, and demand continues to taper. Absent a severe winter, this dynamic might not change. The U.S., however, has a ton of natural gas reserves, and any plan to lessen our oil dependence could be a boon for natural gas. The U.S. Natural Gas ETF (NYSE: UNG) is a bet on the price of natural gas improving. Currently at $9 a share, it trades below NAV of $9.47. (For related reading, see Commodities That Move The Markets.)

Finally, we come to my favorite, the Market Vectors Agribusiness ETF (NYSE: MOO), which is a play on agriculture. This ETF holds positions in companies that directly benefit from an increased demand in agricultural products; or in layman's terms, food. As the world's population grows and arable land diminishes, the need for better seeds, more fertilizer and agricultural equipment also will grow.

Bottom Line
How the global economy will look once we fully exit this recession is anyone's guess. Compelling data support the coming of inflation, which would benefit the prices of all the commodities above. (For more, see Macroeconomic Analysis.)

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