What investments are you favoring these days?

secretwealth · Post by **secretwealth** » Wed Sep 12, 2012 12:55 am

Equities have spiked but P/E ratios are low. I'm thinking of getting some more corporate bonds, but I fear 2013 might hit them hard. Commodities scare me. I think energy companies might be good, though.
What are you thinking of?

Maus · Post by **Maus** » Wed Sep 12, 2012 1:35 am

I am about to roll my $250K+ 401(k) into a self-directed IRA. I will be allocating it according to the classic Permanent Portfolio: 25% stocks (VTI); 25% long bond (TLT); 25% gold (IAU) and 25% cash (probably SHY).

larry · Post by **larry** » Wed Sep 12, 2012 1:41 am

I've been buying dividend stocks on the dips. I'm watching about 60 different stocks and adding to existing positions when I can lower my cost basis or if I anticipate a dividend increase soon.
My income investing portfolio is public.
http://dividendincomeinvesting.com/
Larry

Maus · Post by **Maus** » Wed Sep 12, 2012 1:52 am

@larry

Hey, I see you've got some AMNF. Isn't that a great little company? I bought 1000s at a basis of $0.40/s several years ago. I wish I'd bought more, but hindsight is perfect and I have truly embraced the PP philosophy that you cannot time the market.

before45 · Post by **before45** » Wed Sep 12, 2012 2:45 am

My broker is convinced that bonds are going to take a big plunge in the next year or so, I think because they're such a bad deal compared to stocks that people are going to get tempted to try equities again. But what goes down eventually goes back up, so even if he's right I don't know that it would matter much for you PP folks.
My current general strategy is high-dividend stocks but I'm not buying anything unless there's a substantial market pullback.

secretwealth · Post by **secretwealth** » Wed Sep 12, 2012 2:50 am

Same here--I like value, but dividend yields suck nowadays. It's a crappy time to buy in, but I also fear that equities are going to keep rising.
Yes, timing the market is often a fool's errand, but the market has been more trend than fundamental driven since 2008, which favors timing the market over DCA or a consistent strategy like indexing or PP. Just my opinion.
I feel like high income bonds will appreciate until the end of the year, but 2013 is going to see a big boost in equities. I expect a pullback before then--the recent rally is too much.

tylerrr · Post by **tylerrr** » Wed Sep 12, 2012 3:41 am

i love watching my 4 part Permanent Portfolio.....It's giving me a conservative, steady return.
BTW, If the stock market crashes, which I think it will in next two years, will you guys stay in the PP. I think it does well during a stock market crash if I remember correctly.

Dragline · Post by **Dragline** » Wed Sep 12, 2012 4:21 am

I've been pretty happy with my investments in Lending Club recently.
My equities have done well too, but I am considering selling a good chunk of them by the end of the year. They seem inflated at the moment.

George the original one · Wed Sep 12, 2012 4:22 am

The hot performers in my portfolio have been the BDCs, which means I'd be pretty wary of buying into them. With the exception of PNNT.
Hmm, it's probably time to update my shopping list and then I can tell you what looks like a good deal in the dividend growth universe.

George the original one · Wed Sep 12, 2012 5:16 am

Of the major dividend growth stocks, COP, MAT, and MCD seem like reasonable candidates. I already have COP and MAT, so MCD is finally on my shopping list.
Secondary choices, to fill out for yield, are KMP, JCS, NSH, DPM, WPZ, & SNH. Yes, only JCS is not an MLP or REIT.
INTC and KLAC would be on my list, but they've both recently announced lower guidance, so can easily go lower or sideways.

larry · Post by **larry** » Wed Sep 12, 2012 8:05 am

@Maus
Yeah, that was a good little pick. I wish they offered dividend reinvestment on that one. I'm with you on the buying more thing.
I'm also wondering if they are going to raise the dividend again or maybe pay a special divy before the end of the year?
Larry

jennypenny · Post by **jennypenny** » Wed Sep 12, 2012 12:16 pm

@secretwealth--I thought this article was a nice roundup of current bond options. https://personal.vanguard.com/us/insigh ... s-09042012 What's interesting is that the article is the closest Vanguard ever comes to advising people not to invest in a particular product. Maybe they're being overly cautious and purposely keeping investor's expectations low in case bonds go through their own version of 08-09, I'm not sure. Of course, you shouldn't lump all bonds together (just like stocks). I own a fund that's mostly corp med-high grade with an average maturity of 5-7 years. I'm comfortable with that fund.
Honestly, I think my best investment this year has been our garden. Our grocery bill has been very low since July, and I have plenty of food stored for the winter. Our second best investment has been converting the living areas in the house to a greenhouse with a glass roof. It has almost eliminated our heating costs and lets us grow food indoors.
I guess that wasn't really SW's question, but I'm just sitting on a bit of cash waiting for an opportunity. While I wait I'm investing in other things. And yes, I'm a doomer

Dragline · Post by **Dragline** » Thu Sep 13, 2012 12:39 am

Here's an excellent video about the current investment climate that just came out today (interview of Ray Dalio):
http://www.youtube.com/watch?v=SFaRazMpxcM
I love how "unslick" this guy is in terms of speaking style.

Ed · Post by Ed » Thu Sep 13, 2012 1:34 am

My first post should probably go in the introduction category... but knowing what everyone's doing with their money is more interesting right now.
My portfolio currently looks like this:

10% Canadian Index - VCE

10% US Index - VTI

15% International and Emerging Index- VXUS

10% US preferred Shares - PFF

10% Canadian Utilities - ZUT (to be replaced with individual stocks to save MER%)

20% Canadian REIT's - ZRE (to be replaced with individual stocks to save MER%)

5% Bonds

10% Canadian Oil Companies

10% Misc (BRK.B and some possibly soon to be sold covered call ETF's)
The Canadian content is there mostly because I don't have any room left in my tax sheltered accounts

and there's favourable tax treatment of Canadian companies here.

Chad · Post by **Chad** » Thu Sep 13, 2012 2:00 am

I'm more interested the political investment angle right now. It's likely that capital gains and dividend taxes go up no matter who gets in. Probably a little less with a Romney win and a little more with Obama, but it's unlikely either is hugely different. Both of these increases in taxes would apply to next year, so we could see some serious sales in dividend stocks that have appreciated significantly before year end.

Chad · Post by **Chad** » Thu Sep 13, 2012 2:03 am

Also, natural gas for the long term.

secretwealth · Post by **secretwealth** » Thu Sep 13, 2012 2:06 am

Yeah--I like VNR now that the share price fell.

JasonR · Post by **JasonR** » Thu Sep 13, 2012 1:49 pm

dragoncar · Post by **dragoncar** » Thu Sep 13, 2012 2:34 pm

Well, 700k in gold looks like this:

So 200k looks to be about the size of a fist. What to do with all that gold? Keep it on your nightstand?

jennypenny · Post by **jennypenny** » Thu Sep 13, 2012 2:53 pm