In a previous post, I shared with you my current “top-down” asset allocation. Unlike the conventional brokers and financial talking heads who preach a “strategic asset allocation”, I do nothing of the sort. 

I favor a tactical asset allocation strategy, that is dynamic and changes with major shifts in the economy and the market. The standard, conservative 50% stocks / 50% bonds allocation, might be fine for grandma and uncle Stan, but what happens to that allocation in a high inflationary environment? Would you still keep 50% of your money in bonds, just because “the computer said so”?

See, the market is like a band of retarded goat fondlers who flit about, to and fro, hoping to catch people off-guard, with no goats. Finding zero goats on your property, they then proceed to try to rape you, water buffalo-style (it’s not pretty).

I figure if “they”, (aka “the market”) are coming for me, I might as well be a moving target, instead of letting them push me face down into a rice paddy. Better still to manoeuver [sic] around with a “short” kick to the groin here or there using inverse ETFs. But I’m getting ahead of myself.

As I said before, currently, I have about 25% in cash, 20% in bonds, 40% in equities/ETFs, and 15% in “alternatives”. When you’re a responsible investor, with enough liquidity to treat everyone in Guatemala to a Happy Meal, you do shit like allocate your money to different investments and asset classes–just to beat up on the retarded goat fondlers, so to speak.

Let me give some examples of what I mean:

Cash - (Duh)….cash, meaning money market funds, Einstein.

Bonds - [[MUB]] , to help mitigate the tax bill each year. I pay an aggravating amount of income tax, which vexes me to no end. I also have a stable of individual munis from TX, CO, WY, NE, SD, ND, MN, IA. The lands between the river and the mountains. Fuck CA and FL—they’re bankrupt, destitute and populated by a high percentage of women with fake boobs.

Equities - I have both a long term and a shorter term trading accounts. In my long term account, I hold stocks like…Apple Inc. [[AAPL]] , Chesapeake Energy Corporation [[CHK]] , Gilead Sciences, Inc. [[GILD]] and Chevron Corporation [[CVX]] . Average holding period: six years.

In my intermediate trading account, I have “fuckus stocks” like Agrium Inc. (USA) [[AGU]] , Axsys Technologies, Inc. [[AXYS]] , Big Lots, Inc. [[BIG]] , Cleveland-Cliffs Inc [[CLF]] , Flowserve Corporation [[FLS]] , Fording Canadian Coal Trust (USA) [[FDG]] , Potash Corp./Saskatchewan (USA) [[POT]] , Walter Industries, Inc. [[WLT]] , Weatherford International Ltd. [[WFT]] . 

In the short term account, Elan Corporation, plc (ADR) [[ELN]] ,  [[IBB]] , State Street Corporation [[STT]] , Cullen/Frost Bankers, Inc. [[CFR]] , SVB Financial Group [[SIVB]] ,  Johnson & Johnson Johnson & Johnson [[JNJ]]  to offer up some names. I’m staying away from the market ETFs and instead, playing the sector ETFs with stuff like [[FDN]] , [[IBB]] , [[XLE]] , [[FIW]] and [[FAN]] .

This kind of market rewards stock pickers, not closet indexers.

Finally, “alternatives” include things like: [[USO]] , [[DBA]] , [[FXP]] , [[SKF]] , [[SRS]] , [[QID]] …basically, stuff that will help me hedge my other bets.

This is not an all-inclusive list, but you get the picture.

Tomorrow, I will be on the road headed for the high mountain country in Colorado. It will be a “green” weekend for me, no doubt.