Thrifty Trend

… They bite too…

30 reasons for Great Depression 2 by 2011

What’s the point of reading that - except to recognize that there’s real negative sentiment right now?! Yes - economic news these days is shitty++. Bulls are off in vacation (whereas some of them should be in prison…).

I should mention that this particular gloom and doom bear is… well… not really appreciated by his peers. Appropriate response found to his gloomy article:

I thought this guy had been a little too quiet lately. Apparently he was preparing his excuse for those bullet-proof, can’t lose “Lazy Portfolios” he pitched all year.

Who am I to know if he’s right or not. For that matter - I believe the current market reactions only proves that nobody really knows what will happen next. The only thing that is certain is that nobody sees any good in the future.

Continuing from my previous posts about strategic portfolio allocations, I present to you the following called “Bearded-Bear”:

Allocation is as follows:
SHY - 80% (Safest known income - Short term treasury bonds)
IAU - 10% (Gold trust)
SH - 10% (Short S&P 500)

The rational behind this portfolio is as follows: The portfolio seeks to maintain asset values over the long run regardless of the market volatility. The portfolio assumes the value of the treasury bonds will erode over time and therefor has a small allocation of gold. The allocation to gold and to bear funds is very small to reduce the affect of volatility. In case the portfolio is implemented at times of bull markets, the portfolio is expected to maintain its value because the large allocation to bonds will produce enough income to overcome the losses of the bear fund. It should show some gains when inflation is in play by the rise in the price of gold. At an extreme bear market like we are having, where deflation is in play, the bear fund takes it’s turn and bursts ahead to produce a portfolio that could withstand time.

That was the thought behind this portfolio, I’m not trying to sell it to you. In fact, I encourage you to read my disclaimer.

Related Posts:

Go no where Portfolio
Strategic Income Portfolio
Collection of Standard Sample Portfolios (Balanced, Conservative, Growth etc)
Investment Tactics

Cheers!

P.S. I just heard Bill O’Reilly telling his radio listeners “Frugality Now”… So I’ll link back to my own “Frugality Now” post.

Cheers Again.