Are we not afraid - alternative investment ideas?

[Bossman]

As of the end of 2020, the US national debt was over 27 trillion dollars with the debt to GDP ratio at 129%. It is likely we will be adding several additional trillion dollars to this debt in 2021, with no end in sight. We are starting to see real inflation and do not buy the Fed's story that the current inflation is largely reflecting transitory factors. The markets are at all time highs and it looks like the bull is starting to get tired. Geo political risks are rising and this country is experiencing new challenges both within and without.

Would it not be prudent to put 5-10% of one's portfolio in alternative investments that can thrive during a turbulent future? To date, I have put 2.5% of my assets in Barrick Gold Corporation (GOLD), although historically Gold has not been a good investment.

Other suggestions for alternative investments is being solicited.

Thanks!

 

[Sunset]

Lead.
Booze (spirits and wine).
Dried Food.

I actually have the view that everything is improving, and didn't get anywhere near as bad as I thought it might.
So I'm thinking of selling off 1 or 2 guns , and a case Russian rounds, as I have more than enough.

I even sold off my roto-tiller, as this is the last year I'll garden, since I figure next summer we will be traveling again

 

[RobbieB]

Marijuana.

 

[HI Bill]

Dodgecoin?

 

[old medic]

Lead.
Booze (spirits and wine).
Dried Food.
I even sold off my roto-tiller, as this is the last year I'll garden, since I figure next summer we will be traveling again

Like the way you think... except I kept the tiller....

 

[pjigar]

Like the way you think... except I kept the tiller....

Me too. Kept a push tiller and bought a 5' PTO driven tiller.

All jokes apart, no one can predict the future so just find out how much gold makes you happy and stick with it. I like 3% number. I call it an insurance.

 

[VanWinkle]

My gold investment, a wedding ring, lost it's value for me when my DW passed 2 years ago. I decided to let my son have my gold investment as he was getting married in 2020. I found the value to be increased as my son appreciated the gesture and my ring was not just lying in a drawer. I wish everyone good luck with their gold investment, I've just never been a believer in gold in anything other than jewelry.

 

[whatnot]

VanWinkle - I love your sentiment on passing your ring to your son. Great way to honor your wife.

 

[olyveoil]

Historically, I have been a GOLD avoider.
As I get older and want a little more hedge am becoming more inclined.

I bought some GLDI. Thinking about some other precious metal type assets to about 2%-4% of portfolio.

 

[Chuckanut]

I'd keep some cash at the ready and look for opportunities to 'Buy Low'.

If inflation comes roaring back, I will stock up on 10 year non-callable t-notes.

Maybe I'll buy a T-Bill for the grandkids.

 

[RetireeRobert]

Farmland. Are there any REIT's that invest in farmland? or ETF's?

 

[pb4uski]

.... Maybe I'll buy a T-Bill for the grandkids.

EE Savings Bonds might be better if you/they can wait 20 years... they are guaranteed to double in 20 years... that's 3.57% APR.

 

[racy]

Farmland. Are there any REIT's that invest in farmland? or ETF's?

I have a local realty company that offers deed of trust certificates (for farm loans) for accredited investors. I have several yielding a weighted average rate of 3.4%.

Some info on trust deed investing here: https://tinyurl.com/y2s6a545

 

[target2019]

Farmland. Are there any REIT's that invest in farmland? or ETF's?

Farm REITs
The closest that an investor can get to owning a farm without actually doing so is by investing in a farming-focused real estate investment trust (REIT). Some examples include Farmland Partners Inc. (FPI) and Gladstone Land Corporation (LAND).

https://www.investopedia.com/articles/investing/091615/how-invest-farming-without-owning-farm.asp

Is it a good idea? I don't know.

 

[nap470]

My gold investment, a wedding ring, lost it's value for me when my DW passed 2 years ago. I decided to let my son have my gold investment as he was getting married in 2020. I found the value to be increased as my son appreciated the gesture and my ring was not just lying in a drawer. I wish everyone good luck with their gold investment, I've just never been a believer in gold in anything other than jewelry.

Great sentiment! My wife and I wear matching wedding bands that were worn by her grandparents.

 

[calmloki]

Young nephew is very hyped on selling covered calls, or puts if the market turns. He says he studies on the weekend, sells the covered calls on a Monday, and has the contract end on Friday. Mainly doing Square. Says he is making 2-2.5% per week and expecting 75% or so per year.

My eyes glaze over and I just can't imagine his plan is maintainable. Some on here sell covered calls - are they as safe and profitable as he is claiming? Is this the new market and is my VTI ancient history and due to fail/make no money?

 

[yhoomajor]

Young nephew is very hyped on selling covered calls, or puts if the market turns. He says he studies on the weekend, sells the covered calls on a Monday, and has the contract end on Friday. Mainly doing Square. Says he is making 2-2.5% per week and expecting 75% or so per year.

My eyes glaze over and I just can't imagine his plan is maintainable. Some on here sell covered calls - are they as safe and profitable as he is claiming? Is this the new market and is my VTI ancient history and due to fail/make no money?

No different than people who bought ARKK because they saw other people making more than 100% in it last year. Not sustainable in the long run in any shape or form.

Unless Government hands out $500,000 to every millennial in the name of social equity and social justice, which is plausible in today's upside down world.

 

[Koolau]

Young nephew is very hyped on selling covered calls, or puts if the market turns. He says he studies on the weekend, sells the covered calls on a Monday, and has the contract end on Friday. Mainly doing Square. Says he is making 2-2.5% per week and expecting 75% or so per year.

My eyes glaze over and I just can't imagine his plan is maintainable. Some on here sell covered calls - are they as safe and profitable as he is claiming? Is this the new market and is my VTI ancient history and due to fail/make no money?

Mentioned elsewhere one of my direct reports was letting his broker do this for him so he could take 8% of his stash during his early retirement. He ended up repositioning cars for a living - and I think he still is almost 20 years later.

Another guy (long time friend) decided he could be a day trader - just before the great recession. Worked for about a year - then it didn't and he lost his shirt. I don't think most of us have what it takes (and I don't even know what that is) to be making money in the markets outside of more-or-less buy and hold or index funds, etc. No matter how good we become, the market will throw a curve that makes most systems fail. Pick an AA that makes you comfortable and work the plan. (Gamble on the side if you must.) YMMV

 

[WhenIsItTime]

Farmland. Are there any REIT's that invest in farmland? or ETF's?

Checkout LAND.

 

[ERD50]

Young nephew is very hyped on selling covered calls, or puts if the market turns. He says he studies on the weekend, sells the covered calls on a Monday, and has the contract end on Friday. Mainly doing Square. Says he is making 2-2.5% per week and expecting 75% or so per year.

My eyes glaze over and I just can't imagine his plan is maintainable. Some on here sell covered calls - are they as safe and profitable as he is claiming? Is this the new market and is my VTI ancient history and due to fail/make no money?

No investment that provides outsized profits is safe. That's just the nature of the game.

Covered calls and puts are not by their nature safe or risky, it depends how you use them.

I used to do a lot of covered calls and cash covered puts. My goal was not 2.5% per week, more like 2.5% a year. And while it worked, and I think it makes sense that it should work long term, it just became too much work for me to hold enough stocks to maintain as much diversification as I wanted. I saw a lot of volatility in the way I was doing it, and I was fortunate to get out while I was ahead.

The conservative way to do covered calls is to think of yourself as the casino. The buyers of those calls are doing some gambling, putting up a little amount hoping for a big return. While they are betting, you are putting up a larger amount (you own the underlying stock) and are taking a few % off the top on every bet. But then one or more of your stocks go south (it happens eventually), you can't get a decent price for the calls you were selling, so to continue, you need to drop the strike price of the call closer to the now lower stock price. If it gets called, you just bought high and sold low - too many of those and your profit gets wiped out.

It should (according to my understanding) average out in the covered call sellers favor, but that's not always going to pan out w/o lots of diversification. And that takes a fair amount of work.

But if he's targeting 75% a year, he should also expect an occasional -75% a year as well! It's just a matter of time.

-ERD50

 

[MichaelB]

Late, but this thread was moved to the Market Strategy forum where it is a better fit.

 

[MRG]

Young nephew is very hyped on selling covered calls, or puts if the market turns. He says he studies on the weekend, sells the covered calls on a Monday, and has the contract end on Friday. Mainly doing Square. Says he is making 2-2.5% per week and expecting 75% or so per year.

My eyes glaze over and I just can't imagine his plan is maintainable. Some on here sell covered calls - are they as safe and profitable as he is claiming? Is this the new market and is my VTI ancient history and due to fail/make no money?

I sell calls on equities I've owned for years, like Apple. I also write cash covered puts on stocks I'd like to own at lower prices. There's risk, mainly you lose huge gains on calls or your put into a bunch of stocks if the market turns. You can make ~2% weekly on volatile stocks if you're writing at the money. I aim for 2% monthly. Can you do this indefinitely? Probably not.

ETA: I sell mine on Friday so I get the time decay over the weekend. If prices don't move you can pick up 10%-15% decay.

 

[jr6035]

Why not use QYLD,XYLD or RYLD?

 

[Bossman]

Found an interesting article on these covered call ETFs , https://seekingalpha.com/article/4428200-qyld-ryld-and-xyld-how-they-work-are-they-sustainable, that questioned the sustainability of these type of funds. Putting that aside, I decided to open a small position in QYLD, the largest of the three ETFs within a qualified retirement account, which in essence defers the tax on the dividends.

As of now, my plan to survive the upcoming cataclysmic market correction along with rampant inflation is relying on a 2.5% position in GOLD and a 2% position in QYLD. Still looking to allocate another 4.5-10% of my assets. Thanks for the ideas...