Tuesday, January 22, 2013

Dylan Grice: Witch Hunts, Inflation Fears, and Why I’m Bearish in 2013


Related links:

Gearing up and buying back


In the article above, Grice says:
“With quality equities, gold, some cash, you have – I think – a reasonably robust portfolio of safe havens, which will actually do reasonably well for you.”
I was speaking with a friend this weekend who, like me, shares many of Grice's concerns. When trying to think of a barbell-type of approach to take, this is what popped into my mind at the time, which is similar to what Grice mentioned:
  • 20-30% in quality stocks that can hold up in tougher times and preferably ones that pay a dividend.
  • 20-30% in the DoubleLine Total Return Bond Fund, or a diversification among other similar funds (any suggestions?) that focus on the mortgage market, keep short duration, and are also worried about inflation.
  • 10% in gold (just in case).
  • 30-50% cash, patiently awaiting for fat pitches, lower market valuations, and rampant fear.
Seems like a fairly robust allocation to me.