Investing Ideas - Not Trading

The idea for longer term investors and not traders that can stomach market volatility in the meantime is to be in high dividend paying companies facing inelastic demand curves. These would be utility and consumer staples companies. The idea behind this is that it does not make sense to park your money in bonds given the very low yields you would be earning and the inherent risk in owning fiat money instruments. Stocks are paper assets, too, but assuming the world does not go into a Mad Max state, one should still be fine holding certain stocks that are based on real things with as low volatility as possible. Had I liked stock valuations, I would like mining stocks, but at current valuations -even though they are 30% to 50% below their 2007-2008 peaks- are in the bubble territory. This does not mean that in all this illogical market action they cannot go higher into the bubble territory, but that is not investing, but gambling. My advice is for those concerned investors who cannot put all their money into gold.

You should still put at least 5-20% of your money in physical gold. Possibly even more is smart, but I know most people are still not too comfortable with the idea of holding physical gold. On top of that 5-20% in gold you should put some money into silver, palladium and to a lesser extent platinum. I, similar to Jim Rogers and Marc Faber, like agriculture and arable land and cows and wheat, etc. But these are not realistic investments for many not so wealthy people. I do not believe in holding the futures for the longer term, but you can go that route if you really want to. Comex is a fraud, so I do not like doing anything related to them personally.

Utility and consumer stocks should hopefully be better inflation hedges than bonds for sure. They should, also, act as hedges against a collapse of fiat money. While banks and many other companies will falter in such an environment, people cannot live without food and energy, so utility and consumer companies should still be around and doing well in such a scenario. These are not sexy investments, but rather hedges and longer term protection of buying power ideas with a little bit of an income kicker through high dividends.

Some of the names that come to mind are Verizon (VZ), Exelon (EXC), PPL Corporation(PPL), Public Service Enterprise (PEG), First Energy (FE), etc. There are a lot of them. The best idea would be to create a diversified portfolio of these to hedge yourself against company risk. As a complementary speculative idea, I like some oilsands companies with high dividend rates such as Canadian Oilsands (COS-U CN) in Canada with its 7% dividend yield.