Using a technique known as the Copernicus method we can say, with 60% certainty, that we will by out of Iraq within 1-4 years. What does this have to do with anything you ask? For one thing, we will have to pull out of Iraq eventually, and according to this rather soon. Will 1-4 years be enough time to solve all the problems? Probably not. That will be enough time to figure out how to get the troops out safely, then do it. There will not be time to stabilize the government, let alone think about our economy.

With almost every candidate in the 2008 election pledging to pull out of Iraq ASAP, the above guessitmation appears reasonable if not likely. That would most definitely be a big kick in the wallet…if you’re not prepared. So, like our welcome page says, we will look at this from a economic standpoint, and attempt to help all of our readers minimize the impact on their investments, and maybe even make some profit from it.

First and foremost, we must consider big oil. The Iraqi government (semi)recently passing legislation to allow US companies to drill in Iraq’s massive (second largest in the world) oil reserves. Now, with a bill like this oil stocks seem like winners all around. However, one must consider that when pulling out, the companies’ safety is no longer guaranteed. Especially when considering Turkey’s incursion into Iraq, this unstable region is not the best place for US based companies to be drilling. Therefore, we would say if we are pulling out, don’t fall for the trap of buying oil field service companies. On the other hand, big oil companies do not have to actually be in Iraq to potentially benefit from the aforementioned legislation, so even if there is violence in the fields, big oil would not be hurt as bad.

This brings up another point. If the military withdraws, then someone has will have to step in to protect US assets in Iraq. Chances are that companies drilling in Iraq will use security firms to protect their assets. Unfortunately almost all of these firms are private. One that you might want to look into though is DynCorp International Incorporated (DCP). Unfortunately this company is not heavily traded so use caution if you plan on picking up some shares. Although most of these companies aren’t public, you can still benefit by purchasing arms manufacturers. Now, keep in mind that we’re looking for companies that provide small arms, as they’re being bought by private companies, not the military. We would recommend United TechnologiesCorporation (UTX) because of their ownership of Pratt and Whitney. We feel this is a strong choice because chances are they will do well whether or not we pull out of Iraq.

As usual we will keep you updated with any new developments (and hopefully some more investment ideas). So no matter what your personal views on Iraq are, we hope that you have found some useful information, and that no matter what happens your investments are safe. Happy investing!

~Invest this!