We invest 5 to 15% of our total portfolio in Gold and Silver, at all times. During the crash we were at 15%,and we are currently at 5 to 7%.
The remainder of our "cash" real $ portfolio (whatever your allocation is, mine being 50%) is always invested in a "laddering" of various treasury bills/bonds. "Laddering" means we dollar cost average,
buying at all times, and buying a variety of issues.
We currently own in our Real Money Portfolio:
TLT-Long term treasuries
TIPS-U.S. Treasury Inflation Bonds
GLD, SLV, SSRI-All are Gold or Silver ETF's
CEF-Canadian Exchange Fund-a cheaper way to own actual gold and silver bullion, unlike the ETF's above
EFR-Eaton Vance Senior Floating Rate Fund (this is a good alternative to TIPS)
ZTR-Zweig Total Return Fund: this is actually held in our CORE portfolios, this bond/treasury fund currently yields over 10%
"Laddering" means holding various incremental price points, buy ins, on Treasuries, and shifting positions. For example, I am going to recommend selling TLT and shifting assets to IEF, Barclays' 7 to 10 Year Bond fund, or at least shifting a portion of cash assets. I think shorter term IEF will outperform TLT for this period.
Buy: IEF Barclays' 7 to 10 year Treasury Bond ETF at market this week, and continue to buy on any market IEF dips.
Investors appear to be shifting from riskier junk bonds to safer treasuries. It shows in the charts ($TNX) The 7 to 10 year Treasury Bond ETF (IEF) began breaking out to the upside last week, while the best indicator for junk bonds, Lehman High Bond ETF (JNK) fell dramatically. Investor caution is stepping in. We’ll watch this to see if the difference between JNK and IEF shifts below the September low, which would be a sure sign of the market shifting to safety. And safety makes sense, as we’ve already been there a long time.
