Inflation - Dollar Sucks Portfolio

[MJ DeMarco]

I'm taking suggestions for the "Inflation - Dollar Sucks" Portfolio.

This portfolio will focus on securities/stocks/ETFS that will gain in an inflationary period and with a corresponding devaluation of the USD.

Unlike the MISERY portfolio, I will actually make real-money investments in the securities if the technicals pose an entry point. At this moment, many of these are overbought so I won't enter quite yet. As for the AUD and CAN, I am already invested in those currencies.

So far I have...

SLV (Silver)
DBC (Commodity Tracking Index / light, sweet crude oil, heating oil, aluminum, gold, corn and wheat)
DBA (Commodity Agriculture Index)
PWE (Penn West Energy - Canadian Trust, Energy related + Stronger Canadian Dollar)
GLD (Gold)
FXC (Canadian Dollar - Tight fiscal policy, heavy commodities exposure)
FXA (Australian Dollar - Tight fiscal policy, heavy commodities exposure)
CMC (Commercial Metals)

Any suggestions?

If inflation hits 10% and the USD sinks another 15%, what will benefit?

 

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[ZDS]

Your last portfoli did so well I kind of want to throw a grand into this and see what I can get on return

 

[randallg99]

consider a hedge.... possibly go short Euro via ETF. This can protect upside to the dollar shorts you are playing.

also read recently hedge funds sector du jour is health/pharma

here is list of ETFs...
Commodity ETF List ETFs

just be careful, some of them have significant tax regulations associated with them

 

[MJ DeMarco]

also read recently hedge funds sector du jour is health/pharma

Isn't the new ADMIN's health care wish list a danger to health/pharma?

 

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[Salinger]

How about just keeping it simple and shorting the Dollar Index?

You could also go long the Euro and Yen. We should see some negative correlation with those.

 

[hakrjak]

The dollar is down so much lately, you don't think it's due for a pop up -- like last time it went down awhile?

Cheers,

- Hakrjak

 

[Reefbreak]

Re-balancing my portfolio as well, and am giving thought to inflation, dollar, etc. TIPS (Treasury Inflation Protected Bonds) will be a part of the re-balancing. I also intend to go a little heavier into "cash" as money markets and CD's will also be more appealing if interest rates go higher. I have learned (the hard way) that one does not need to be fully invested in the market at all times.

I do think healthcare is a good long term play. Tele-medicine, Healthcare REITs, drug companies all warrant further research.

 

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[Bobo]

If inflation hits 10% and the USD sinks another 15%, what will benefit?

My first thought was alcohol stocks, others concur in that assessment:
Drink up! Alcohol stocks look tasty - May. 30, 2008

Pfizer should do well as entertainment budgets shrink, the purple pill is cheaper than a movie....

Otherwise, look for companies that purport to be green and have no viable business plan who are very unlikely to stimulate the economy in any meaningful way - they'll be getting lots of our tax dollars.

 

[gofalls]

Direct Canadian Farmland Investing through Agcapita (Jim Rogers is Chairman, must be Accredited and Canadian) No way to really track it for the thread purposes because its private but I would put that in my portfolio.

And a Chinese company that makes 50cc scooters b/c that’s what the middle class will be driving soon.

 

[biophase]

I'd like to create a Zombie Portfolio. For those who don't know, many people use the zombie excuse when stockpiling guns, ammo, food, building bomb shelters, etc... People will ask why you are doing it and you say "It's for when the zombies come alive." That's how you justify buying 5000 rounds of ammo and everyone understands.

 

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[MJ DeMarco]

I'm going to add

PST - UltraShort 7-10 Year Treasury

To the portfolio since I am expecting treasuries sell off.

 

[Jonleehacker]

I'm going to add

PST - UltraShort 7-10 Year Treasury

To the portfolio since I am expecting treasuries sell off.

Be careful with a long term hold on these leveraged ETFs, recently doing some research and the movements don't correlate with the underlying asset very well for longer time frames.

I'd add:

DBA & MOO as interesting agriculture based inflation plays.

 

[BryanC]

I'd just start growing and printing my own currencies if the Dollar Collapses.

 

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[Reefbreak]

Be careful with a long term hold on these leveraged ETFs, recently doing some research and the movements don't correlate with the underlying asset very well for longer time frames.

This is sage advice. :smx9: I purchased commercial RE Ultrashort ETF's and learned the hard way that these are not long term holds.. like stocks and bonds. The math that goes into figuring their value wil make you dizzy. They "reset" everyday, etc.,etc. Although I also believe there is an opportunity in betting against Treasuries, I would only use the leveraged ETF's for very short term holds (1-2 days) and daytrading. I should have followed the age old advice "Only invest in things you fully understand".

To add to my above recommendations on inflation stocks... I am also looking at rental based REITs. Although apartment buildings are not recession proof, they are recession resistant. And, the preferred shares on some of these companies pay a nice guaranteed dividend while you hold it. BTW, no matter what the portfolio, and with the exception of commodities... I like companies that are paying dividends and provide income in what I think will be a sideways market for several more years.