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Laddered Safety in Investments


ICUMD

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Would appreciate views on the following question:

 

Based on what's happening to HCG and if we assume possible spread risks to other major Cdn banks,  how does one recommend protecting investments from financial crisis?  What would be the order of safety?

 

Stocks-  like FIH?  A diversified stock portfolio?

Cash? - which currency, where to hold it- bank account?  Mattress?  If you're only insured to $100K, what do you do with the rest?

Bonds?  If so, which ones?

Precious Metals? 

Realestate?

Dont worry about it and just spend it?

 

Thanks!

 

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The below is what I have been doing - both in what I'm buying and selling as well as how I think about the larger structure of the portfolio

 

Actual Trades

Puts or put spreads & covered calls

Long duration bonds

Natural Resource stocks that are conservatively financed

Replace non-dividend paying stocks with deep-in-the-money leaps (frees up cash, extreme downside risk mitigated, volatility/options are cheap at the moment)

Short small-cap indices

 

Strategic Themes

Higher cash balances

Limited exposure to the U.S.

Being more disciplined with selling a portion after an aggressive run-up

 

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