Buy Gold – Junk Bonds

FED set to cut rates on Tuesday – The dollar is already going in the wrong direction, and a .25 or .50 rate cut this week will lower its value even more. I sold one of my three US securities (BAM – Brookfield Asset Management) two weeks ago, and dumped it all into gold, and while one of my other US stock (ORCL – Oracle) is in the sweet spot [corporations are cash heavy and looking to squeeze out productivity, enterprise technology investment – particularly in the service oriented architecture realm – will continue to be that shortest distance between most two points], there are solid companies selling bonds right now at yields above 10%. One in my area, Yankee Candle, I noticed last week they were selling 10 year paper at right around that yield. In 2017 Yankee Candle may have been gobbled up by a bigger fish, but all I’d have to worry about would be it going bankrupt between now and then, which it won’t. You’ll more than double what you put in.

I’m not 100% cynical, but pretty close at this point. Foreign currency, high yield paper from the right company, gold and some other commodities…it’s time to step away from the table at this point. If you’ve got retirement money in mutual funds, be sure to check on their allocations, and if it’s a domestic stock fund, perhaps one that could be especially hurt by a slowdown in consumer spending (what wouldn’t?), it’s time to hit the books and make an INFORMED decision to either hold what you’ve got, or like I’ve said, move that money off onto the sidelines.