cooprider, I think you asked me months ago what I was investing in. I forgot to reply then, and this just reminded me. I think at the time I laid out my basic portfolio, and you were just asking about my hedges. Anyway, in brief here it all is again:
Basic portfolio =
1. 401k and other tax-sheltered investments = mostly fixed income stable value investments. Done for diversification and risk-aversion and tax minimization reasons. This is my “reserve fund”.
2. Stocks = 10% in V’guard domestic index fund + 7.5% in V’guard int’l index fund + rest in a personally picked high-dividend 50-stock portfolio diversified across continents, industries, and company sizes, with a bias towards small stocks. I live on the dividends from this.
3. “Hedge fund” of about 10% of my assets, that is invested highly specualtively, or to hedge dangers in my basic income portfolio. Right now I have JPY/GBP and JPY/EUR cross-currency futures, in favor of the Yen, split equally, for a nominal amount equal to my total assets, or 10 times the amount in the “hedge fund”.
4. Housing fund. This is now between 7% and 9% of my assets and still building, but should be enough to pay cash for a 2+2 condo in a non-gang area when the property market is nearer the bottom.
I am kicking myself a little for not thinking harder about Chris Scoreboar’s late 2007 advice to short the US equity market for the first quarter of 2008. Probably will turn out to be a very good call. I even kinda agreed with it, but hadn’t spent enough time thinking it through to act. Maybe I’ll add S&P500 futures (long/short) to my quiver for next hunting season.
