Skip to comments.Market Meltdown Portfolio
Posted on 08/18/2012 1:17:33 PM PDT by Son House
In this video I give you a rundown of a portfolio that I think will hold up in any adverse market collapse. The premise boils down to 3 major equity/asset categories:
1)Energy %25 2)Precious Metals %25 3)Defensive (ie Walmart, JNJ, McD,etc) %50
This is a simple, straight-forward approach to protect your capital and wealth in this tulmultuous time.
Part 1: Just a recap, here are the companies I give a green thumb to: Energy: 25% of Portfolio 1) Royal Dutch Shell (RDS.A) 5.5% yield 2) Calumet (CLMT) 10% yield 3) Uranium Participation Corp (URPTF) 0% yield or Cameco Corp (CCJ) 2% yield Precious Metals: 25% of Portfolio
1) Buy one Major Gold Minor: -Barricks Gold Corp (ABX) 2% yield -Goldcorp (GG) 1.40% yield -Newmont Mining Corp (NEM) 2.8% yield -Kinross Gold (KGC) 2% yield -Randgold (GOLD) 0.40% yield
2)Buy 1 minor Gold producer/explorer: -Carpathian Gold (CPNFF) 3) Buy 1 Major Silver Producer -Silver Wheaton Corp (SLW) 1.30% yield 4) Buy 1 mid-Major Silver Producer -Silvercorp (SVM) 1.50% yield And then allocate some of your portfolio to physical precious metals. Look into SilverSaver(dot)com
Part 3: 50% of the portfolio Moat Stocks:
1)Walmart (WMT) - 2.30% yield 2) Johnson & Johnson (JNJ) - 3.90% yield 3) Proctor and Gamble (PG) - 3.6% yield 4) Coca-Cola (KO) - 2.70% yield 5) McDonalds (MCD) - 3.20% yield
About SonOfAbba's channel => Investor, entrepreneur, libertarian-leaning Christian.
He’s got more good stuff too, in this one he points out what is wrong with Democrat Economist, I hope he catches on with some conservative talk show host, a much better guest then all the ones the media likes to get for the ‘unexpected’ headlines;
Here’s all his video’s;
I am getting out of the stock market entirely until it starts obeying the rule of law. If I see some laws regarding segregating customer funds, and rehypothecation, and people actually getting arrested and going to jail. then I’ll consider going back. Until then, I am going to look for ways to invest which are not run out of Wall street.
Oh yeah, completely understand the risk tolerance, been catching up with Ann Barnhardt and I am thinking twice about it all too, but for now, I am in;
Ann Barnhardt: If Youre Still in These Markets Youre Either Stupid or On Drugs!
Ann: Its just par for the course, and really the big news within the last few days relative to the PFG case is the 7th Circuit Court of Appeals decision- relative to (and I know were getting into lots of different companies and lots of different outfits here) the Sentinel Management Group, which was a non-clearing FCM, that was a Ponzi, that crashed all the way back in 2007. So this happened 5 years ago, and theyre just getting the stuff adjudicated- like I said, the decision from the 7th Circuit Court of Appeals just was published on Friday.
What that decision said, unbelievably, is that basically all property rights in the United States are gone. Up in smoke. The court ruled that if you have money with an FCM and they fraudulently used YOUR MONEY that theyre holding as a custodian- if they use your funds to go and borrow money to finance their own in-house proprietary trading desk, when that Ponzi collapses, the customers have absolutely no rights to their own property, and that the counter-party- meaning the mega-bank that lended the FCM the money fraudulently, they stay at the front of the line!
Decent positions, especially the energy 25% and Metals 25%; I have this and cash. My strategy is just to be in energy stocks and metals, with a 50% position in cash; except for a govt 401K which is 100% cash. Having seen the results of both Gulf War stock crashes, and the 2000 and 2007 meltdowns, I think that this position allows me right the markets up with holdings, dump them high and then buy your commodity stocks and anything else that drops 40% plus that I fancy and watch my profolio double on both ends of the bounce. The best part is if you are investing retirement accounts there is no capital gains tax!
It isn’t just about risk tolerance, but morality as well. My money is for living expenses and for retirement. If Wall street loses it, then I can’t replace that money. I can be out on the street in my old age and they will not bat an eye, and the government will not prosecute them.
What has been going on is fraud, and I will not reward it anymore. There are plenty of small things to invest in close to home that do not require Wall street fraud.
Chevron: 2008 High = 85 // Crash Low = 50. . . but recently at 110
Conoco-Phillips: 2008 High = 60 // Crash Low = 23
Exxon: 2008 High = 85 // Crash Low = 55
So "Energy" lost you at least 40%, on paper
GLD: 2008 High = 100 // Crash Low = 70
SLV: 2008 High = 20 // Crash Low = 8
Metals got you on average about a 50% haircut.
JNJ: 2008 High = 62 // Crash Low = 40
KO*: 2008 High = 28 // Crash Low = 17 (But recently 40)
WMT: 2008 High = 55 // Crash Low = 43 (But recently 70)
P&G: 2008 High = 65 // Crash Low = 40
MCD: 2008 High = 60 // Crash Low = 41 (But recently 90)
Full Disclosure: I have owned every investible on this list. As of this moment, I probably have half of these in some account - whether a retirement account. . . . or not.
Virtually EVERYTHING on this list lost at least 30% on paper. That's a small crash, by historical standards.
Maybe you can sleep like a baby while the value of your portfolio loses 30% - 50% in a few weeks. If so, you're made of sterner stuff than me. I have stops under all my positions.
And remember - when you sleep like a baby, you wake up every hour ------ CRYING!!
* NOTE: KO has JUST split 2 for 1. So these prices were about double the prices in my post, back in 2008/2009.
(Just something to think about. your mileage may vary)
You reminded me of another thread on Self Directed IRA’s, some interesting stuff here too, this is a good post, PHYZZ is the physical metals as in gold and silver, a new acronym for me...
SD IRA What can we expect?
Originally I was going to just withdraw my IRA funds and take the tax hit. In Feb 2012 I did this and accepted the hit but not long after I found the service provider who helped me through the legal niceties of the SDIRA. My tax hit had the potential of being in the low 6 figures and the thought of sending that amount to the BEAST disgusted me.
The SDIRA can be used for many purposes but in my case the notion of buying phyzz appeals to me since it is completely without counterparty risk. The firm that walked me through this process set up the LLC thats my conduit for buying the phyzz and holds the checking account (since the LLC uses a bank to conduit the funds for the purchase of PMs)
My original Fidelity IRAs were transferred to an alternate custodian who is not only knowledgeable about how to do an SDIRAthey have a department devoted to that purposethey are also a member of my LLCs.
I am the managing member since my focus and direction in the asset purchases is not something the custodian can or is willing to do. But it does provide for that all important IRA custodian umbrella that keeps things legal and within the IRS rule book.
Since we transferred our IRAs (me and my wife) from Fidelity to the custodian, the actual IRA remains within a custodian account. But the funds can be transferred one more time and still be in the keeping of the custodian and me. The funds are routed to the special LLC set up to receive funds and then wired to buy phyzz which SD Bullion which, coincidentally, finalized purchase on the PM dip today.
During the entire process there was, to my best knowledge, no leakage of the funds to the taxable world so I am confident that there is no taxable event. From this point on I need to be careful of how I handle these assets. I do have them in safekeeping completely separate from any other assets in a safe that is labeled SDIRA.
These are the basics to this system and from what I have heard hundreds of people using this system find it works. Doc and Bull Run are researching this fully to make sure their system is on solid ground but the ones we did appear to be within the legal and tax parameters. We also plan to leave the assets intact and untouched for possible as long as a decade until we uncork it for our retirement. We are early 60’s. FYI
Ok. What’s this kid’s track record again??
I agree with some of his picks, especially the ones that pay dividends. At least you get paid to put up with the volatility.
Thanks for all that, actually I been long term 401k since about 95 and sat threw the lows while seeing co-workers sell, looking for about 20 more years, but if few business are going to be doing business as in the last 4 years, there’s no use sitting through that.
That brings up a political point if I may, as when someone says both parties are alike, no, they were, but the conservatives are actively trying to rid Republicans of the spoiled politicians, well Democrat supporters will put up with it at any cost just to see a Democrat elected over a Republican.
Yeah..... I’m almost 57. I can’t sit and watch my 401k’s turn into “201k’s” and then wait 20 years to get back to where I was.