What is the best way to accomplish this without getting fleeced?
Equities are overvalued and have nowhere to go but down IMO (esp since Bernanke made clear today QE3 isn't happening unless the economy dips). Treasury yields are so low we have negative real interest rates and TIPS are selling at a premium (paying the gov for the privilege to lend them money, fuck that). Corporate bonds may be overpriced but the yield is better and since the ffr is gonna be kept low til at least 2014, interest rate risk isn't really that much of a problem, no?
Probably index funds. There's a storm coming for the bond market, but like you said not until 2014.
Foreign high dividend paying stocks of countries that will see their currency appreciate.
You'll enjoy:
Capital gains Currency gains Dividends
^ Agree with the foreign part of above. China will grow at ~8% this year compared to a measly 2% (if were lucky) for US and CAD. Stick to an EM play, a div is an extra incentive.
Or, just go with AAPL. o.0
Short answer is diversification. You say "capital preservation" but then mention equities - so assuming you mean you want a portfolio with low probability of losing alot of money, not a portfolio in which no losses are acceptable (if no losses acceptable, just do cash or T-bills). Assuming former is the case:
-Start averaging into global equities. If you wanted to keep things very simple, you could accomplish this through an ACWI ETF, Vanguard has a cheap one. Will give you U.S., EAFE, and EM. Don't try to pick one geography as mentioned above unless you have the time to monitor valuations and adjust your exposure. You could put up to 50% in equities and still have a pretty low vol portfolio. -Bonds. Some mix of Treasuries, investment-grade corporate, and high yield (20/20/10)?. Treasuries = deflation hedge, even though they are very expensive now, they will appreciate if equity markets get crushed. IG corporates give you the yield, not as much deflation protection. HY gives you more yield, and is primarily floating, so unlikely to get dinged as badly as other FI securities if rates increase.
Cool thanks for the ideas guys
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