Y'all are a bunch of wankers!

Hedging portfolio for war

After several years being away from stocks completely, I've gotten back in with a small individual portfolio that represents about 5% of my net worth.

Besides buying a few dividend paying blue chips (O, V, MCK) recently, I've added some precious metals and resource sector stocks.

I bought:

CEF - Central Fund of Canada
GDX - Van Eck Vectors Gold miners ETF
REMX - Van Eck Rare Earth Minerals ETF
SPROXF - Sprott, Inc.
SIL - Global X Silver Miners ETF

Oil also looks interesting here. I'm looking at the ETF's/ETN's.

What are your thoughts on the current situation with Syria, Russia and China (trade war)? It should be bad for stocks and bonds but good for commodities, no?
Permalink IT guy 
April 11th, 2018 10:31am
Dumb.

Precious metals retain their intrinsic value. So when the economy is good they stay the same, when bad and there's inflation, they rise with inflation and hedge against it. You dump money in gold and silver when you think you're entering an economic contraction followed by artificial attempts to jumpstart and pay debt by inflating the money supply (QE).

When the economy is booming you invest in that.

If you think big war is coming, invest in steel and aluminum. If you think america great is coming, invest in companies that make things.
Permalink Reality Check 
April 11th, 2018 10:41am
I'm not hedging anything. I carry on my weekly trading.
Permalink DrNo 
April 11th, 2018 10:41am
To clarify:

When the economy is booming you invest in that [economy].
Permalink Reality Check 
April 11th, 2018 10:41am
In trading, we always trade no matter we have war or not. When the stocks market stops trading, civilization ends.
Permalink DrNo 
April 11th, 2018 10:43am
"So when the economy is good they stay the same, when bad and there's inflation, they rise with inflation and hedge against it. "

Not exactly. The miners are leveraged plays on the underlying commodities, so even though the metals price might not move that much, the miners can become multibaggers.

Also, if they "stay the same" then why did they make a massive bull run between 01 and 07 or so? I made a lot of money in both bullion and mining stocks during that time. Silver in particular moved from about $5 to $50.

The metals themselves are like inflation-hedged cash. Investors also tend to buy them during times of uncertainty.
Permalink IT guy 
April 11th, 2018 10:55am
Also, I like the industrial uses of silver and rare earth minerals, which ensures that there is demand whether we have conflict or not.
Permalink IT guy 
April 11th, 2018 10:56am
But maybe I'm wrong and buying too late. I did miss the "bottom" in 2016. It would have been better to buy then.
Permalink IT guy 
April 11th, 2018 10:57am
"When the economy is booming you invest in that. "

I don't disagree. The title of my post was "Hedging portfolio for war".
Permalink IT guy 
April 11th, 2018 11:00am
We have some money in 401k's and IRA's, as well as a little bit in one of these robo-advisors. Most of my assets are in real estate.
Permalink IT guy 
April 11th, 2018 11:01am
Someone should write a book on the various strategies to adopt under various circumstances.
Permalink Marius Moga 
April 12th, 2018 7:58am
Someone probably has.
Permalink Algernon Montgomery 
April 12th, 2018 4:50pm

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