This King World News with Michael Pento (click here) is one I can recommend.
The really interesting part starts are around 7 minutes in. The really interesting idea is his proposal for a simple way to trade the current markets. He proposes:
- Having two portfolios, an inflation portfolio and a deflation portfolio.
- Switching between them depending on the action in the US dollar.
- When the dollar is falling you switch to the inflation portfolio.
- When the dollar is rising you switch to the deflation portfolio.
Anybody who has been paying attention is aware that either the risk trade is ON or the risk trade is OFF, so Pento's proposal is not exactly new. The cool part about the proposal, from my perspective, is having two default portfolios set up and ready to go ahead of time. With the portfolios prepared ahead of time you can take plenty of time to get them right and then focus on getting the timing right on when to use them.
So, here's my challenge. Help me work out the following:
- If you are managing with an IRA account and can't go short or trade leveraged futures or do anything but covered call options:
What goes in the inflation portfolio?
What goes in the deflation portfolio?
Are there any core positions?
- Same questions if you have a trading account where everything is possible.
Leave me a comment with your thoughts. If I get the time I'll put my own thoughts on this up in a separate post.
MontyHigh, www.worldofwallstreet.us
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