The Dow Jones Industrial Average is making record highs, knocking the 2007 peak off its pedestal, but investors aren’t celebrating.

Since the Dow hit its March 2009 low, many sage market players followed the stimulative monetary and fiscal policies, ignored the noise of pundits predicting doom and gloom, and invested heavily in equities. Only in retrospect can their bold calls be recognized as wise.

I often look to social sciences and psychology to help investors understand the importance of the collective genius. In one of my favorite books, The Wisdom of Crowds, James Surowiecki points to statistics scientist Norman L. Johnson’s maze experiment as one of many illustrations of intelligent group decisions.

Johnson sent groups of people one-by-one through a maze, recorded their paths and timed the results. Do participants take a left or a right? How many steps does it take to make it through?

Then, he calculated how many total steps each individual took to reach the end of the maze. The average ended up to be 12.8 steps, but the group collectively did much better, taking only nine steps. More importantly, “there was no way to get through the maze in fewer than nine steps, so the group had discovered the optimal solution,” wrote Surowiecki.

Time and time again, Surowiecki found evidence of collective decisions to be superior to individual results, whether researchers asked people how many jelly beans are in a jar or how much an ox weighs. The “collective guess was very accurate, and was better than the vast majority of individual guesses.”

This collective wisdom theory was also used to predict the winner of elections. Nate Silver of The New York Times’ FiveThirtyEight blog analyzes data on state and national polls along with economic information, including GDP, jobs and inflation. His interests in playing poker and writing about baseball made him adept at studying statistical means, odds and probabilities, and his prediction model results are phenomenal. During the 2008 presidential election, Silver correctly predicted 49 out of 50 states correctly. And in last fall’s election, he correctly forecasted the electoral outcome in all 50 states.

Surowiecki notes that the wisdom of crowds is not a natural idea to many of his readers. Rather, it is counterintuitive because people are wrongly led to believe that “well-informed will be outweighed by the poorly informed, and the group’s decision will be worse than that of even the average individual.”

I believe Americans feel that investing in the stock market today is counterintuitive because of unemployment statistics, dysfunction in Washington and ongoing negative news about the U.S. economy. When discussing the Dow’s all-time high, The New York Times indicated that investors aren’t pouring Champagne like they would have in past years. “The stock market’s volatility has scared retail investors for several years. A total of $556 billion has been taken out of mutual funds focused on American stocks since October 2007, according to the Investment Company Institute. That is an enormous pot of money that largely missed out on the market’s recovery,” says The Times.

Take a visual look at what investors may be feeling. On our new infographic below, using data collected by zerohedge.com, you can see some of the reasons investors have thrown in the towel. It costs about a dollar more for each gallon of gas. Over 6 million more Americans are unemployed, fewer people are in the labor force and almost 50 million are using food stamps. Consumer confidence is vastly different today than it was back then. 

The U.S. financial situation is also different. The economy is growing much slower, the size of the balance sheet is ballooning and debt has skyrocketed. It’s no wonder that gold was about $750 per ounce back in 2007; now, it’s double that.

But it cannot be disputed that the Dow doubled from its 2009 low.

The market noise of today will not be going away. However, investors can gain confidence in following the wisdom of the crowd. As famous investor Benjamin Graham said, "The individual investor should act consistently as an investor and not as a speculator.”

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry.

U.S. oil independence is picking up steam. In December, the country lost its position as the world’s largest importer of oil, with shale production climbing faster than expected. Net imports fell below 6 million barrels per day, domestic production increased more than 1 million barrels per day and demand declined by about 700,000 barrels per day.

In the east, it’s a different picture, as Chinese crude imports reach record volumes. While the U.S. may nudge its way to the top position in the short term, it’s likely that China will “officially overtake the U.S. as the world’s biggest oil importer” in 2013, according to Citi Research.

Despite America’s energy renaissance, the price of a gallon of gas remains hinged on growing global demand and seasonal pricing trends. That’s why the recent bump in gas prices isn’t a cause for alarm, especially for resource investors.

Business Insider shared this chart from Deutsche Bank, showing retail gasoline price trends normalized to December 2012 prices. Going back 15 years, the price for a gallon of gas has historically risen during the first half of the year, and generally declined in the last half of each year. While this year’s increase of $0.53 per gallon seems alarming, the rise is a non-event when you compare it to the seasonality of oil and oil products.

Last January, we posted a seasonal chart showing a similar pattern, with returns of the S&P 500 Energy Index rising in February, March, April and May.

Themes to Capitalize On
This time every year, the futures market builds in the rising price of oil with the assumption that refineries are getting ready for the summer driving season. Annual maintenance is scheduled, causing inventories to build. Also, the summer fuel is a different blend that is more expensive to produce.

While there’s not much a consumer can do to lower the price of gas at the corner station, investors can act today on the more significant emerging energy trends. Here are three ways Global Resources Fund (PSPFX) portfolio managers, Brian Hicks and Evan Smith, plan to seize the potential opportunities:

1. Domestic Refiners:  Strong overseas demand, a weak U.S. dollar and a glut of oil from growing unconventional production in North America have driven U.S. exports of gasoline and distillates to record volumes, heralding in a new golden age in refining. 
2. Petrochemicals:  A U.S. manufacturing renaissance combined with inexpensive natural gas feed-stocks unlocked from prolific North American shale plays have fueled profits of the U.S. chemical industry.
3. Midstream:  With the rapid development of North American oil and gas shale basins such as the Marcellus in Pennsylvania, the Eagle Ford in Texas and the Bakken in North Dakota, infrastructure constraints are being alleviated with new investment in assets to gather, process and transport growing oil and gas volumes. We believe certain Master Limited Partnerships (MLPs) that have the right type of assets in the right geographic locations will allow investors to reap the benefits of the development of shale plays in the U.S. and Canada.

You can access these trends through select petrochemical or oil & gas MLPs, ETFs or stocks. Alternatively, you can take advantage of the expertise and multi-faceted approach of the Global Resources Fund. Explore the different industries within natural resources now.

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500.

In 2012, Turkey was the best performer among the emerging markets we track on our Periodic Table showing a decade of returns. All developing countries rose last year, but stocks in Turkey climbed an astounding 56 percent.

See a decade of results for yourself with our interactive periodic table

While visiting the country last week, I was happy to see my explicit knowledge of Turkey’s growth was supported by my tacit knowledge.

Istanbul has been in the midst of a fantastic transformation from an impoverished population to one of affluence. Popping up among the beautiful Ottoman mosques, Byzantine churches, palaces and bazaars are ultra-contemporary art sculptures, shopping malls and lush landscaping. This blend of ancient with modern fits well with the young, vibrant and culturally diverse crowd that hangs out in the local cafes, shops and galleries.

Investment managers like me aren’t the only ones showing increased interest in Turkey’s new-found prosperity. Secretary of State John Kerry visited Turkey during his first overseas trip as America’s top diplomat.

German Chancellor Angela Merkel, the powerhouse figure of the European Union, was also in Ankara recently to meet with President Abdullah Gul and Prime Minister Recep Tayyip Erdogan. The topic of their discussion is not new, but suggests a “new chapter” for Turkey. These leaders are picking up the conversation started years ago regarding Turkey entering the European Union (EU).

Tim Steinle, portfolio manager of the Eastern European Fund (EUROX), says that unlike Greece, which fudged its numbers to join the EU, Turkey was held to a higher standard. But it doggedly pursued its aspiration, and in the process of implementing the EU accession chapters, such as the Right of Establishment & Freedom to Provide Services, Company Law, Financial Services, Information Society & Media, Statistics, Financial Control, and Science & Research, had modernized its economy, making it competitive with those of Western Europe. In addition, open trade with the EU allowed it to build a diversified export economy.

Turkey’s admittance to the EU had stalled over Cyprus, but more recently, France and Germany seem to be warming to the idea. Under newly elected President Francois Hollande, France is opening another chapter to the accession, and Angela Merkel’s visit to Turkey is signaling a shift in Berlin’s position on Turkey’s membership.

This wasn’t the only time Turkey reformed its policies. In 2001, the country experienced its own devastating financial crisis, and as a result of that experience (with which the rest of the world can now sympathize), the government adopted tough, but important financial and fiscal reforms. These reforms helped the country rebound, and its strong banking regulations kept banks well capitalized compared to the U.S. and Europe.

In the charts below, you can see the result of the government’s determination. From 2010 through 2012, Turkey’s GDP exceeded that of Europe, the Middle East and Africa (EMEA), as well as the rest of the world. Through 2015, GDP is also expected to be greater than EMEA’s GDP as well as overall world GDP. Simply stated, Turkey “remains superior in the region,” says Wood & Co.

Turkey’s manufacturing sector, in areas such as the automotive industry, white goods that include refrigerators and washing machines, and glass makers, has also been growing in strength.

For nearly two years, Turkey’s purchasing managers’ index (PMI) has been significantly stronger than Europe’s and “outstrips global averages,” says Wood & Co. Although the PMIs around the world fell rapidly in mid-2011, Turkey’s manufacturing hasn’t fallen below the expansion number of 50 as often, and as significantly, as Europe. According to Wood, Turkey’s PMI also recovered, “signaling growth ahead.”

Turkey’s latest manufacturing PMI number of 53.5 in February was slightly lower than its January figure of 54.0, but manufacturing remains solid and in expansion territory. Businesses are reporting an increase in new orders, new products and new clients and “new business from abroad increased at the fastest pace since January 2012,” says HSBC.

With the country exhibiting positive demographics, strong consumer demand and an open, competitive economy, Turkey is at a figurative, as well as literal, crossroad between Europe and Asia. The European Energy commissioner Günther Oettinger annoyed Germany when he suggested that the EU needed Turkey more than Turkey needed the EU: “I would like to bet that one day in the next decade a German chancellor and his or her counterpart in Paris will have to crawl to Ankara on their knees to beg the Turks, ‘Friends, come to us.’”

However, Spiegel Online reports Erdogan hinted that the emerging economy may consider joining the Shanghai Cooperation Organization, which includes countries such as China and Russia, instead. “The economic powers of the world are shifting from west to east, and Turkey is one of these growth economies,” remarked the prime minister.

My visit to Istanbul was thrilling, and I’m equally excited about the continued investment prospects for Turkey as it gains in economic strength. U.S. Global’s Eastern European Fund (EUROX) is a unique way to gain access to this area, as a significant percentage of its holdings are located in Turkey. Read more about the fund here.

Tim Steinle contributed to this commentary.

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio. The Eastern European Fund invests more than 25% of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.