Wednesday, February 29, 2012

Wall of Worry Investing

But this is the hand we have been dealt, so we might as well make the most of it. Scratch that - we might as well get even.
Here are five things you can do right now:
   1. Buy stocks with characteristics like bonds: Right now the best examples include Master Limited Partnerships (MLPs), particularly those that are energy related. Not only are many of them poised to profit from rising oil prices, but the high, stable income stream many of them pay lends stability in volatile markets. The same is true of many food, water and technology companies.
   2. Keep bond duration short: Stick to shorter-term maturities with duration under five years if you're buying bonds directly. If you own bond funds or ETFs, check to see that the duration is on the shorter end of the spectrum. When interest rates ultimately rise, shorter duration holdings will shield your money from potentially catastrophic drops as longer bonds take an epic gut shot.
   3. Stick to "glocals" with fortress-like balance sheets: The idea here is very simple -diversify your holdings and future growth away from U.S. and EU legacy debt that will hobble the established markets for years to come. What you are looking for is companies serving the "rising billion." That's the group formerly known as the "bottom billion," or the poorest of the poor who are finally engaged in global growth. Think India, China, Malaysia and Vietnam here. Even the Middle East will fit the bill in a few years.
   4. Buy metals and commodities: It's not too late. "Everybody" expects these to go down; that's usually a bullish influence under normal circumstances, but even more so as paper currencies fail. And make no mistake about it, paper money is failing.
   5. Prepare for an age of abundance: I've said it before and I'll say it again - the greatest wealth is always created from the ashes of chaos. This time will be no different. If you are not in the game you'll miss 100% of the investment opportunities the current financial crisis creates.

The Fed's War on Capitalism

Here's how I see things. The "Whitewash Ministry" has basically five options:
   1. Repression
   2. Devaluation
   3. Austerity
   4. Deflation
   5. Inflation

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