ThePanelist.com - Long Term Investor Who has Made Good Calls is Selling TIP

Long Term Investor Who has Made Good Calls is Selling TIP

Written by David Neubert

Monday, 10 March 2008

A reader who likes to send me his portfolio decisions has had a better call on the markets lately. What I like about him is that he sees his portfolio as an investment, is very critical of US government policy, is nervous about the debasing of the dollar via inflation and takes long term views. He's older than I am and a professor from the North, but I'll call him Stevie.

Stevie has been a big fan of TIPS via the Inflation Linked Exchange Traded iShares Fund (TIP- $111.43), but recently he's been selling and reallocating.

After selling some more TIP and splitting the proceeds between cash and closed end funds that focus on dividend paying stocks, here is his portfolio:

7.5% equities via four closed end funds
27.5% cash
40% TIP funds
20% real estate
5% gold coin

Disclosure: I own TIP. I have recently sold some TIP. I hold Treasury Inflation Protects Bond Directly. I do not own any equity-oriented closed end funds. The portfolio described by "Stevie" and its performance described above is not verified.

Opinion Disclosure: I have enjoyed watching the Stevie portfolio but I think it is way underallocated to equities.

Site Disclaimer.

Tags

See All Tags

David Neubert

Exchange Traded Funds

TIP

Comments (1)

Subscribe to this comment's feed

...
written by Davis Freeberg , March 10, 2008

With TIPS trading under the real interest rate, its probably a good time to be selling, but I'd probably avoid all of the closed end funds regardless of the area that they invest in. Most of the the closed end funds are heavily dependent on the auction rate preferred market for their leverage/yield and with everything having ground to a halt, some of these investments may be in a lot of trouble. Because of the liquidity fears, closed end funds may be trading at a bargain to their NAV, but I'd do due diligence on this issue because its likely the next area of the market to blow up.

Write comment