Bob Irish Reporting: Delray
Beach, FL.
Have you repositioned your portfolio to
benefit from our phony recovery?
Not yet? You’ve been meaning to, but just
haven’t gotten around to it?
Imagine that it’s October 2007. The Dow is
hovering near 14,000. By every metric, the market appears overvalued.
Your portfolio has had a nice run, and you’re contemplating taking some
profits. You know, getting a little more defensive. But you don’t. Maybe
you’re too busy. Maybe tomorrow.
But that tomorrow never arrives.
And then the market starts to get sick. Stock
prices decline big time. You kick yourself and wait for a rally so you
can do some selling. But the market doesn’t cooperate. By the time it
bottoms out in March 2009, more than $37 trillion in company values – 59
percent – have been wiped out.
What if you’d made your move in October 2007?
What If?
What if today is the 2009 equivalent of
October 2007? The danger in the current markets isn’t a secret:
-
P/Es are significantly above fair value
after the 50 percent move off the bottom.
-
The only spending in this economy is coming
from Washington.
-
The budget deficit for this year is $1.8
trillion.
-
U.S. debt this year will be 98 percent of
GDP.
-
Insiders are selling like crazy.
What you should be doing with your portfolio
isn’t a secret either. You should:
-
Sell your dogs and move into quality issues.
-
Favor stocks with healthy cash holdings and
growing dividends.
-
Add high-quality corporate bonds to your
asset mix.
-
Diversify overseas.
-
Buy gold.
What’s Stopping You?
Too busy? Maybe you’ll do it tomorrow?
Stop kidding yourself.
There are always “reasons” not to get
important things done. But you can get your portfolio repositioned in
one day.
Here’s how …
Take a Trip
Think about the last time you went on
vacation. More specifically, think about the day before you left. If
you’re like me, that was one of the most productive days you had all
year.
So imagine that tomorrow is the day before
vacation.
And it’s October 2007. Act accordingly.
From To-Do to Done
How good would it feel to finally get your
investment house in order? How good would it have felt to have taken
control in October of 2007?
Yes, you’ve been “meaning to.” But “meaning
to” doesn’t cut it. Consider the following little ditty from an
anonymous poet. We posted it in IDE a couple of months ago. It’s worth
looking at again:
Mr. Meant-to has a comrade,
And his name is Didn’t-do.
Have you ever chanced to meet him?
Did he ever call on you?
These two fellows live together
In the house of Never-win.
And I’m told that it is haunted
By the ghost of Might-have-been.
Sound Profits
For guidance on where to invest, count on
IDE’s team of experienced analysts. And look for the new
Sound Profits newsletter, debuting in a couple of weeks.
Meanwhile, we can tell you one thing to do
right now: Buy gold.
Yesterday, we told you why we’re absolutely sure that gold will go
up. Today, we want to tell you how you can make gold part of your
portfolio.
How to Buy Gold
Buying gold can be tricky. You can’t just walk
into Walmart and ask for a pound of the stuff. So I asked IDE’s Rusty
McDougal, our resident expert on all things shiny and yellow and Editor
of the
Resource Windfall Speculator, how he would do it.
Rusty doesn’t trust the “paper golds,” like
the gold ETF with the symbol GLD. He says they could claim to have gold
that may not be there. Instead, he suggests that you start off with
“physical gold that you can get your hands on and leave fingerprints.
This should serve as a foundation for precious metals investing. Gold
stocks can be added on this foundation, if desired.”
Rusty says that taking delivery from COMEX is
a bit of a task but an excellent way to purchase large quantities of
physical gold. He also suggests looking into online companies like
Tulving.com that specialize in delivering physical metals.
If you are only interested in having a
short-term trading position in gold, the ETFs may suffice. But Rusty
warns that you shouldn’t expect that type of gold investment to protect
you in case of a monetary breakdown. A sudden and widespread run on
those instruments would likely expose them as having much less gold than
advertised.
Invest Safely,
Bob Irish
Investment Director
Investor's Daily Edge
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