How much of my retirement nest egg dare I risk in the market to counter inflation?

Oldman answered 3 months ago …

This' a really tough question! I'd look at CanRoys that pay a yield above 10%, with the 15% withheld in a taxable account being a U.S. Tax Credit, and I wouldn't put more than 2% of a portfolio in any one security. Also, for the after-tax investment of the MRD's, you might consider NIO, which has a fairly high tax-free yield (about 5+ %). Again, don't purchase a position above 2 % of the total portfolio.

In the sheltered accounts, you may want to look at EverBank's site for principal-protected (FDIC insured) investments in currencies of strong, debt-free currencies. The interest payments would be taxable, otherwise.

At current rates, neither TIPS or the ETF that holds TIPS, nor I-Bonds will help to hedge vs. rising rates.

Purchasing commodity-holding (GLD, IAU, SLV) ETFs, even if they become "cheap", is not permitted in a sheltered account.

Eveything else has a variable principal value: O (the Income Realty stock, that pledges to increase dividends, has suffered, as did ADVDX (whose dividend is now ca. 18%, but whose NAV has dropped by 25-30%), and all the other high-yield, but variable closed-end funds, have decreased in NAV, because their holdings have decreased in market pricing.

There are some ELKS, QUIBS and other, bond-like issues, that may be worth a look:

EGK, EOD, FSB, GEA--but be sure to check the maturity dates and the underlying credit rating of the company...the issuer (Merrill, or CitiBank or JP Morgan) is not a problem, because the securities were bundled or the bonds were broken into small pieces, and aren't part of the Bank's capital, any more than the securities in your brokerages are a part of the Brokerage's capital: If JPM or CB or ML goes bankrupt, the Quibs and ELKs remain. GEA is General Electric (AAA rated) paying 6.5%; FSB is Financial Services paying 16% due 12/15/2101, currently @ $10.77/QUIB. Again, not more than 2% of each of these belongs in the portfolio. These ELKS< QUIBS, etc., pay quarterly or semiannually...some can convert to stock of the company in a relatively short time, so be sure to read the prospectus, in case the Company stock declines below a particular point, at the maturity date, the principal is going to be less than the part of the "bond".