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Political disruptions around the world and further inflation should result higher gold prices and, if the economy falters, many investors will sell their common stocks and put their money in gold pushing the price up even further.
In further edited excerpts from the original article* Roy Ward (www.iconoclast-investor.com) goes on to say:
SPDR Gold Shares ETF (GLD)
Given the above, one of my favorite areas to invest in to protect my profits made over the past year and to reduce my portfolio risk is an ETF that invests in gold like the SPDR Gold Shares ETF (GLD)…
GLD seeks to replicate the performance of the price of gold bullion on a one-to-ten ratio. It pays no dividend, has a management fee of only 0.40%, trades on the NYSE and may be bought and sold like any other security. The purchase of GLD will counteract the volatility of common stocks and will guard against a possible fall in bond prices.
PowerShares DB U.S. Dollar ETF (UUP)
Another of my favorite areas to invest in to protect my profits and reduce my portfolio risk is an ETF that invests in the U.S. dollar such as the PowerShares DB U.S. Dollar ETF (UUP)….[which] seeks to track the price and yield performance of the Deutsche Bank Long U.S. Dollar Futures Index. This index is comprised solely of long futures contracts…[that are] designed to replicate the performance of the U.S. Dollar Index – the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc vis-a-vis the U.S. dollar. Total ETF expenses are 0.83% of total value, which is reasonable. UUP pays no dividend….
Bond ETFs
Bond and bond ETFs are usually another good way to hedge against stock market losses but current bond prices are very high and could fall when U.S. interest rates begin to climb.
Conclusion
While I still hold some bond ETFs I am avoiding new bond ETF purchases preferring to buy gold and U.S. dollar ETFs in the current market environment.
*http://seekingalpha.com/article/196040-two-etfs-to-reduce-portfolio-risk-spdr-gold-and-powershares-db-u-s-dollar?source=article_sb_picks