More on this later, but for now just a short note to mention that I have revised the "Hillary Portfolio" of two years ago, gold and munis, and replaced it (partly and in progress) with the "Obama Portfolio", gold and cash.
There are just too many horror stories from state and local governments to own municipal bonds at this time. Even with most of the "stimulus" money and lots of those new Federal Munis going to city, county and state governments, they are all teetering atop the flag pole (except perhaps for North Dakota). The rates are too low to justify the continued risk
I had basically one-third of my total portfolios in munis, but I have been selling them off for weeks and got rid of all the rest yesterday. I'm going to miss all that lovely tax-free monthly income, but it's too risky now. I have been adding to gold holdings on pullbacks as mentioned recently with a good bit of the proceeds, and I will keep the rest in Vanguard's muni money market fund for now. Cash is truly trash now and pays virtually zero income as well as becoming more worthless each day the dollar falls, so gold is a must.
By "gold" I mean 1. real gold stuff in a US bank vault; 2. paper gold like CEF, GLD, and SGOL whose gold (and for CEF also silver) is stored in bank vaults in Toronto, London, and Zurich respectively; and 3. a smaller amount of gold stock index funds, primarily GDX and GDXJ. 2. and 3. are the new recent holdings and hedge me further into the market, but are easy to get into and out of. That's important when buying near new all time highs. If all goes well I may buy more of the "real gold stuff" and close out the paper gold. Meanwhile I have geographic diversification all within US accounts.
This puts gold now near 25% of total managed portfolios, and all of it is in the taxable part. The IRAs have no gold, still mostly bond funds and some higher yield vehicles. I did sell LSBDX after a wonderful run this year again. I also sold some mortgage REITs not held very long, but with modest profits, and all of GIM, the Templeton Foreign Sovereign Bond Fund, which had a very good run for me as with LSBDX. Yields had dropped quite a bit on both. I kept CMO-PrB, a mortgage REIT preferred stock paying nearly 10%.
I keep looking and wishing for the "set and forget" retirement income deal which would be fully hedged against everything "forever". I remember from the nearly hyper-inflationary 1970's when accounts with gold and T Bills only were pretty good for about eight years, and now I'm headed in that direction again... I know some of you are interested in the late Harry Browne. His first "permanent portfolio" idea, not called such at that time, was gold and TBills. He and James Benham put together some investment programs to do that .
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