- 15% Double Long SPX ETF
- 10% Gold ETF (any of the three as far as I am concerned)
- 5% Agriculture ETF
- 10% Swiss franc ETF
- 5% Aussie dollar ETF
- 10% TIP Product (a fund or the real thing)
- 20% Foreign Bonds (most likely a fund)
- 20% Cash
- 5% in equities from a country you think benefits from the US' misery or can still carry on; maybe a frontier market
I am quite certain, the last few weeks notwithstanding, that gold would go up in breadline stock market scenario and any argument that says more gold is probably right.
Basic food stuffs will always be in demand so maybe it has a place in this discussion, at least I think it does.
The Swiss franc is an obvious destination during times of fear and the Aussie could also benefit due to its correlation (real or perceived) to gold.
The idea of a TIP product comes from the thought that a scenario like this would involve inflation going up considerably.
Foreign bonds seems to make some sense unless the entire planet defaults. I would think that the dollar would go down quite a bit in a scenario where the US stock market was facing the big one.
Cash is cash and unless we are in for Weimar-like inflation, cash will have value even if bread and milk are 20% more expensive.
As far as finding a country to put 5% into equities; it makes sense to think a couple of countries will benefit from this scenario or be able to go on about their business as if nothing were wrong in the US. I would think a resource rich country or a frontier market might offer the best shot at this but I have to say most countries would be very badly hurt by the US tanking in this manner.
The position in the double long fund is a counter strategy in case the market goes up. If it rallies 30% in six months the portfolio would pick up roughly 9%. A big lag but not a complete miss either.
As I said in the video over the weekend I assign zero realistic probability to this. I will simply stick to my exit strategy and so if the market does go down 75% I have a chance of missing a big chunk of that. I have not positioned any account in manner spelled out above.
Relative to the holdings above; GLD, DBA, TIP, FXA are either client holdings, personal holdings or both.