Since getting back from Asia two weeks ago I have continued to weed out portfolio pieces that tend to trade in sympathy with equities. This includes closed-end funds of all types, many of the oil and gas royalty trusts, and minor diversification sector funds.
MainStay Marketfield Fund (MFLDX) is my only true equity position. It is a traditional long/short hedge mutual fund and a long term core position. It would go down in a bear market, as it did in 2008, but far less and with less volatility than a long only fund. It declined 20% from its launch in 2007 to the March 2009 bottom while S&P500 went down 50%. Notably, Morningstar's long/short equity index also declined 20% to 2009 but has only risen 8% from the date of MFLDX's launch while the latter has risen 88%. S&P500 has risen 46%.
I would like to add to MFLDX substantially on any major market decline. I was grandfathered into the fund with a smaller position than the $5,000,000 minimum now required, and as a result I can add any amount I want to add at any time. They do have other classes of the fund for lower minimums with higher fee levels. Nevertheless, partly as a hedge of MFLDX and partly as a small speculation, I am holding SPXU the triple net short SPX ETN.
As of February 28, 2014 the total portfolio is up 2.5% year to date. This largely due to gold's rise, but also with contributions from bonds (EDV predominating) and equities. 67% of the total portfolio is in cash and near cash (6 months to 2 years durations) and 16% is in gold. The rest is MFLDX plus EDV and VTAPX (1-5 year TIPs), and bit in SPXU, NUGT, and JNUG, the last two being leveraged gold stock funds.
The gold is a long term position as is the MFLDX. My expectation is that the economy will continue to slow down which will lift bonds and gold. The cash and near cash gives me the liberty to do something no matter what happens.