A Stock-Free Portfolio
Jeffrey R. Kosnett, Senior Editor,
Kiplinger.com
Wednesday, March 11, 2009; 12:00 AM
GOLD (5%)
The yellow metal doesn't pay any income, and it's plenty volatile. But it's a good defense against inflation -- which will surely rear its head when business picks up steam -- and the likelihood of a weaker dollar down the road. With iShares Comex Gold Trust (symbol IAU), you can track the price of gold without having to buy the stuff and store it. It recently traded at $90 per share.
CASH (25%)
With yields generally at less than 1%, cash is trash nowadays. But you won't lose money on your cash investments, and their yields will pick up when the economy recovers and the Federal Reserve begins to lift short-term interest rates. (For ideas on how to invest your no-risk money, see Where to Stash Your Cash Now.)
PREFERRED SHARES OF REAL ESTATE INVESTMENT TRUSTS (15%)
REIT preferreds, like REIT common stocks, have been clobbered this year. As a result, they are delivering extraordinarily high yields. For instance, preferred shares of both Alexandria Real Estate Equities and Corporate Office Properties trust recently yielded 11%, and a Duke Realty preferred yielded 14% (for more suggestions, see A Real Estate Play That Pays).
TAX-FREE-INCOME (15%)
Although interest from municipal bonds is generally exempt from federal income tax, many high-quality munis are yielding far more than Treasuries of like maturity. Some AAA-rated tax-free bonds to consider: Puerto Rico 5.5% general-obligation bond due in 2019. Yields 4.7% to maturity. New Jersey 5.25% transportation bond due in 2022. Yields 4.0% to maturity. University of Texas 5.25% revenue bond due in 2022. Yields 4.0% to maturity.
ENERGY (15%)
Thanks to the recession, oil and natural-gas prices have plunged. But those prices have fallen too far and will almost certainly rise when global economies recover. Two exchange-traded funds -- U.S. Oil Trust (USO) and U.S. Natural Gas Fund (UNG) -- follow these commodities and will appreciate when oil and gas turn up.
BLUE-SHIP IOUS (15%)
These days, high-quality corporate bonds sport unusually generous yields (see Best Buys in Bonds. We found a few that pay well, can't be called before maturity and aren't issued by financial firms: Wal-Mart 5.875% bond due in 2027. Yields 5.6% to maturity. Rated AA by Standard & Poor's. Eli Lilly 7.125% bond due in 2025. Yields 5.4% to maturity. Rated AA. Northern States Power 7.125% bond due in 2025. Yields 6.2% to maturity. Rated A.
What You Will Find Here
- OJOS11
- Articles and news of general interest about investing, saving, personal finance, retirement, insurance, saving on taxes, college funding, financial literacy, estate planning, consumer education, long term care, financial services, help for seniors and business owners.
READING LIST
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2009
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March
(25)
- Idearc (yellow pages spinoff from Verizon) declare...
- GM bonds tumble on Obama Action (Dow Jones Newswire)
- Stocks - some realistic expectations (WSJ Opinion ...
- Lock In Lifetime Income (Immediate Annuities) from...
- Boomers zero in on social networks - USATODAY.com
- Shortcuts to Social Networking - NYTimes.com
- Investing in Trends - from Smartmoney.com
- from CNBC, Current Opportunities in Corporate Bonds
- Downgrades on Bank of America and Wells Fargo
- Economic Stimulus - Medical Records Companies (WSJ)
- Tips on Reducing Your Tax Bill
- 8 ways to leave a mess for your heirs ( Estate Pla...
- Look Up Insurance Company Rating (Standard and Poors)
- Insurance Company Ratings Slip (Wall Street Journal)
- Stock-Free Portfolio (from Kiplinger's in the Wash...
- 7 Costly Mistakes When Leaving a Job (Marketwatch)
- Hidden Tax Tips for Entrepreneurs (Business Week)
- Moody's List Companies at Risk of Default (WSJ )
- List of Leveraged ETFS (FROM YORK INVESTMENTS)
- Steps You Can Take in A Market Decline (WSJ)
- Reverse ETFs not a long term vehicle (WSJ)
- Ford Reducing Debt (Forbes)
- Ford Tender Offers on Debt (SEC Filings)
- Citi Preferreds-government suspends some dividends...
- Citi Preferreds Exchange Terms (marketwatch)
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March
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Blog List
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The EU Is Spending Billions on Hydrogen-Ready, But Where’s the Hydrogen? - I'm all in favor of hydrogen-powered plants to produce electricity if only we had cheap hydrogen. But we don't and likely won't.
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How Companies Dodge Tariffs - Protectionist trade policies are popular on both the left and right. But some economists say they’re likely to backfire.
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Neom wants to build a 1,500-foot infinity pool that's almost 4 times longer than one in Dubai - The pool planned for the Treyam region of Saudi Arabia's Neom megaproject will be 1,500 feet long and suspended 220 feet above the sea if completed.
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Everybody Else Is Reading This - Snowflakes That Stay On My Nose And Eyelashes Above The Law Trump’s New Birth Control […]
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Maximizing Employer Stock Options - Oct 29 – On this edition of Lifetime Income, Paul Horn and Chris Preitauer discuss the benefits of employee stock options and how to best benefit from th...
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Wayfair Needs to Prove This Isn't as Good as It Gets - Earnings were encouraging, but questions remain about the online retailer's long-term viability.
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Hannity Promises To Expose CNN & NBC News In "EpicFail" - *"Tick tock."* In a mysterious tweet yesterday evening to his *3.19 million followers,* Fox News' Sean Hannity offered a preview of what is to come from ...
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Don’t Forget These Important Retirement Deadlines - *Now that fall is in full swing, be sure to mark your calendar for steps that can help boost your tax-advantage retirement savings.*