We preface this post in that our firm is not licensed to provide financial advice to individuals, and this is just for your education.
What is a very interesting portfolio that Investment Science created was in the March 2020 coranvirus crash, when everybody was panicking, there was this portfolio we designed with our data-warehouse. We looked at the volatility of asset classes from each and every panic, and came up with the following for somebody who was 62. In summary we have bonds that pay in different dates in different currencies which diversifies risk.
1) GOLD CRASHED 60% IN 2009 AND 30% IN 2020, so it's not really the best for market panics.
2) Depending on your lifestyle, and how long you live one might need ~3 million to retire. You may need to count on social security. Likewise, look into renting out a house potentially. Otherwise one may want to sell the house and downsize it or buy more real estate to rent
A. There could be a ton of deals in the next 2 years from this virus
B. Rule of 72 dictates take the number 72/ divide by the interest rate, thats the number of years to double your money
1) 38% of your retirement should be in stocks (Similar to Warren Buffet's advice in his books)
2) 62% should be in bonds (Similar to Warren Buffet's advice in his books)
3) We created this portfolio based off of knowing somebody in that age group hates risk, but giving them some upside international exposure on the bonds too on unrelated companies
Currency Exposure (Bonds all pay on different days which helps the currencies!!):
A. Swiss franc 2%
B.Norway Krona 2%
C. South African Rand - 1%
D. British Pound - 4%
E. Euro - 4%
F. USD - 87%
Buy: 62% Bonds especially because we are in a recession for 1-2 years (What's great is one has some exposure to different currencies too, and some very high return bonds, mostly investment grade bonds, the currency exposure may be able to amplify the returns from gold and oil from the currencies)
1) 2% of retirement Pepsi Bonds -> https://markets.businessinsider.com/bonds/1_250-pepsico-bond-ch0008941319 - 8% Yield (Pays in swiss franc) - Good historically swiss franc is worth more than the USD and it gives you some currency diversification and the CHF shoots up whenever the market crashes here
2) 2% of retirement Albertson's Inc -> https://markets.businessinsider.com/bonds/6_625-albertsons-bond-2028-us01310qdb86 7.46% Yield (Pays in USD)
3) 2% of retirement ADT https://markets.businessinsider.com/bonds/adt_corpdl-notes_201212-42-bond-2042-us00101jag13 8.03% Yield (Pays in USD)
4) 2% of retirement American Express https://markets.businessinsider.com/bonds/dl-med-term_notes_201520-bond-2020-us0258m0dt32 7.56% Yield (Pays in USD)
5) 2% of retirement Genl Dynamics https://markets.businessinsider.com/bonds/general_dynamics_corpdl-flr_notes_201820-bond-2020-us369550bb33 9.67% Yield (Pays in USD)
6) 2% of retirement Verizon https://markets.businessinsider.com/bonds/6_730-verizon-north-bond-2028-us362337ak38 8.04 % Yield (Pays in USD)
7) 2% of retirement Toyota https://markets.businessinsider.com/bonds/toyota_motor_credit_corpdl-flr_med-term_nts_201920-bond-2020-us89236tgp49 5.11 % Yield (Pays in USD)
8)2% of Retirement United Health Group https://markets.businessinsider.com/bonds/unitedhealth_group_incdl-flr_notes_201720-bond-2020-us91324pdb58 5.92 % Yield (Pays in USD)
9) 2% of Retirement Viacom https://markets.businessinsider.com/bonds/4_850-viacomcbs-bond-2034-us92553paz53 5.83 % Yield (Pays in USD)
10) 2% of Retirement Catepillar - https://markets.businessinsider.com/bonds/caterpillar_finservices_corpdl-notes_201718-20-bond-2020-us14912hts93 8.32% Yield (Pays in USD)
11) 2% Mortgage backed security AAA rated - https://markets.businessinsider.com/bonds/5_400-abn-amro-bank-bond-2026-xs0592463136 5.4 % Yield (Pays in NOK) - this is awesome because oil should spike back up in December, which means the currency conversion should rise in December and payments are 1x per year
12) 1% South African Bonds (Gives you exposure to gold) - https://markets.businessinsider.com/bonds/south_africa-_republic_of-bond-2040-zag000125980 - 10.21% Yield (Pays in ZAR [South African]- - this is awesome because the ZAR currency should go up longer term due to gold, likewise it has a potential to double as ZAR is at a historical low
13) 2% - USA treasury bills very safe - https://markets.businessinsider.com/bonds/united_states_of_americadl-flr_notes_201820-bond-2020-us912828y537 - 6.4% Yield (Pays in USD)
14) 2% Burmingham, Alabama debt - https://markets.businessinsider.com/bonds/3_500-birmingham-city-of-bond-gb0000993211 - 11.14% Yield (Pays in British Pound) - Pound likely to go up to 40% value in next few years.
15) 2% China government debt - https://markets.businessinsider.com/bonds/china-_peoples_republic_of-Bond-2022-hk0000116407 - 8.69% Yield (Pays in Chinese currency) - This currency likely to increase by about 20% long term
16) 2% Clavas Securities PLC Debt - https://markets.businessinsider.com/bonds/clavis-securities-bond-2032-xs0302269096 - 6.9% Yield (Pays in Euro) - This currency will likely increase 30-50% long term
17) 2% Hypo Vorarlberg Bank AG Debt - https://markets.businessinsider.com/bonds/hypo_vorarlberg_bank-Bond-2020-at0000a10gb9 - 8.79% Yield (Pays in Euro) - This currency will likely increase 30-50% long term
18) 2% Bank of nova scotia - https://markets.businessinsider.com/bonds/bank_of_nova_scotia-_thedl-notes_201520-bond-2020-us064159gw01 5.44% Yield (Pays in USD)
19) 2% Canadian Railyway - https://markets.businessinsider.com/bonds/4_000-canadian-pacific-bond-ca136447ax71 - 9.59% Yield (Pays in GBP)
20) 2% New metro global - https://markets.businessinsider.com/bonds/dl-notes_201818-22-bond-2022-xs1839368831 - 8% Yield (Pays in USD)
21) 2% NordLB (German Bank) - https://markets.businessinsider.com/bonds/norddeutsche_landesbank_-gz-nachrdl-ihss1748_v1424-bond-2024-xs1055787680 6.48% Yield (Pays in USD)
22)2% French Investment Bank - https://markets.businessinsider.com/bonds/soci%c3%a9t%c3%a9_g%c3%a9n%c3%a9rale_sadl-flr_nts_201621-und_regs-bond-usf43628c734 - 6.57% Yield (Pays in USD)
23) 1% - https://markets.businessinsider.com/bonds/pyxus_international_inc-bond-2021-us018772as22 - 79.67% Yield (Pays in USD( - Junk Bond, they will need to pay you even if they go bankrupt, but I don't see any bad news)
24) 2% -https://markets.businessinsider.com/bonds/raiffeisen_bank_intldl-flr_med-term_nts_1520_90-bond-2020-at000b013628 - 10.37% Yield (Pays in USD)
25) 2% Interdevelopment Bank - https://markets.businessinsider.com/bonds/inter-american_dev_bankdl-flr_med-term_nts_201520-Bond-2020-us45818wbh88 - 5.45% Yield (Pays in USD)
26) 2% - African Development Bank - https://markets.businessinsider.com/bonds/african_development_bankdl-flr_med-t_notes_201620-Bond-2020-us00828ebs72 - 5.25% Yield (Pays in USD)
27) 2% - https://markets.businessinsider.com/bonds/swedbank_hypotek_abdl-mortg_cov_mtn_201520-bond-2020-xs1231116481 - 19% Yield (Pays in USD)
28) 2% - https://markets.businessinsider.com/bonds/skandinaviska_enskilda_bankendl-med-term_nts_201520_144a-Bond-2020-us83051gad07 - 14.13% Yield (Pays in USD)
29) 2% barclays Investment Bank - https://markets.businessinsider.com/bonds/0_077-barclays-bank-Bond-2021-xs0126504421 - 13.11% Yield (Pays in USD)
30)2% Swedbank - https://markets.businessinsider.com/bonds/swedbank_hypotek_abdl-mortg_cov_mtn_201520-bond-2020-xs1231116481 - 19.77% Yield (Pays in USD)
31) 2% - https://markets.businessinsider.com/bonds/golden_wheel_tianhldgs_coltddl-notes_201821-bond-2021-xs1751017218 - 14.39% (Pays in USD)
32) 2% - https://markets.businessinsider.com/bonds/china_evergrande_groupdl-notes_201919-22-bond-2022-xs1982036961 - 13.02% (Pays in USD)
Stocks - 32% Of money could be technically in safe haven assets that could provide a 2% return while we wait for the stock market to finish crashing + there are some deals trading less than NAV:
1) 1% - Buy EWEM (barely dropped and less than NAV) - safe
2) 2% - Buy RAVI (barely dropped and less than NAV) - 2% Yield safe
3) 2% - Buy GSY (barely dropped and less than NAV) - 2% Yield safe
4) 2% - Buy CYB (barely dropped and less than NAV) - 2% Yield safe
5) 2% - Buy LDRI (barely dropped and less than NAV) - 2% Yield safe
6) 2% - Buy MBSD (barely dropped and less than NAV) - 3% Yield safe
7) 2% - Buy SCHO (barely dropped and less than NAV) - 2% Yield safe
8) 2% - Buy AGZ (Government agency bond etf backed by federal government) - 2% Yield safe
9) 2% - Buy GNMA (barely dropped and less than NAV) - 2% Yield safe
10) 2% Buy LGOV (barely dropped and less than NAV) - 3% Yield safe
11) 2% Buy PHDG (Good ETF) - Safe
12) 2% Buy CBON (barely dropped and less than NAV) - 3% Yield safe
***Stocks 1-10 you hold onto until the market hits bottom, but sell when ready to buy other stocks*****
13) 1% - Buy BTAL (Good ETF) - Hold onto this long-term dont touch it
14) 1% - Buy FUT (Good ETF) - Hold onto this long-term dont touch it
15) 1% - Buy EMTY (Good ETF) - Hold onto this long-term dont touch it
16) 1% - Buy CLIX (Good ETF) - Hold onto this long-term dont touch it
17) 1% Buy DLBR (Good ETF) - Hold onto this long-term dont touch it
18) 1% Buy IVOL (Good ETF) - Hold onto this long-term dont touch it
19) 1% Buy FUT (Good ETF) - Hold onto this long-term dont touch it
20) 1% Buy GLDI (Good ETF) - Hold onto this long-term dont touch it
~~~~~~~~~~~~~~~~~
Some interesting purchases, when the market bottoms would be:
1) Specifically Home Depot and XOM
2) Airlines will go back up too keep an eye out as well as hotels + cruise ships
As of August 2nd, the portfolio is up about 50%, and interestingly enough the federal reserve bought all of those bonds after the dip because flight to safety dictates in market panics everybody sells all assets (that's why basically almost everything crashes outside of some options and short positions) - so it's important to properly diversify and this was one of the few ways we thought you could, and it looks like it played out for the best! The bond etfs we selected we back-tested and saw they barely moved in other stock market panics.
Interest rates are technically going to eventually go negative because millennial's are not having children and the US GDP shrank by 30%+, so that means the fed will keep printing money and making the rates low, which means people who have stable jobs can take on debt because the money is almost free - just ensure that money is used for investments associated to your risk tolerance levels.
What is a very interesting portfolio that Investment Science created was in the March 2020 coranvirus crash, when everybody was panicking, there was this portfolio we designed with our data-warehouse. We looked at the volatility of asset classes from each and every panic, and came up with the following for somebody who was 62. In summary we have bonds that pay in different dates in different currencies which diversifies risk.
1) GOLD CRASHED 60% IN 2009 AND 30% IN 2020, so it's not really the best for market panics.
2) Depending on your lifestyle, and how long you live one might need ~3 million to retire. You may need to count on social security. Likewise, look into renting out a house potentially. Otherwise one may want to sell the house and downsize it or buy more real estate to rent
A. There could be a ton of deals in the next 2 years from this virus
B. Rule of 72 dictates take the number 72/ divide by the interest rate, thats the number of years to double your money
1) 38% of your retirement should be in stocks (Similar to Warren Buffet's advice in his books)
2) 62% should be in bonds (Similar to Warren Buffet's advice in his books)
3) We created this portfolio based off of knowing somebody in that age group hates risk, but giving them some upside international exposure on the bonds too on unrelated companies
Currency Exposure (Bonds all pay on different days which helps the currencies!!):
A. Swiss franc 2%
B.Norway Krona 2%
C. South African Rand - 1%
D. British Pound - 4%
E. Euro - 4%
F. USD - 87%
Buy: 62% Bonds especially because we are in a recession for 1-2 years (What's great is one has some exposure to different currencies too, and some very high return bonds, mostly investment grade bonds, the currency exposure may be able to amplify the returns from gold and oil from the currencies)
1) 2% of retirement Pepsi Bonds -> https://markets.businessinsider.com/bonds/1_250-pepsico-bond-ch0008941319 - 8% Yield (Pays in swiss franc) - Good historically swiss franc is worth more than the USD and it gives you some currency diversification and the CHF shoots up whenever the market crashes here
2) 2% of retirement Albertson's Inc -> https://markets.businessinsider.com/bonds/6_625-albertsons-bond-2028-us01310qdb86 7.46% Yield (Pays in USD)
3) 2% of retirement ADT https://markets.businessinsider.com/bonds/adt_corpdl-notes_201212-42-bond-2042-us00101jag13 8.03% Yield (Pays in USD)
4) 2% of retirement American Express https://markets.businessinsider.com/bonds/dl-med-term_notes_201520-bond-2020-us0258m0dt32 7.56% Yield (Pays in USD)
5) 2% of retirement Genl Dynamics https://markets.businessinsider.com/bonds/general_dynamics_corpdl-flr_notes_201820-bond-2020-us369550bb33 9.67% Yield (Pays in USD)
6) 2% of retirement Verizon https://markets.businessinsider.com/bonds/6_730-verizon-north-bond-2028-us362337ak38 8.04 % Yield (Pays in USD)
7) 2% of retirement Toyota https://markets.businessinsider.com/bonds/toyota_motor_credit_corpdl-flr_med-term_nts_201920-bond-2020-us89236tgp49 5.11 % Yield (Pays in USD)
8)2% of Retirement United Health Group https://markets.businessinsider.com/bonds/unitedhealth_group_incdl-flr_notes_201720-bond-2020-us91324pdb58 5.92 % Yield (Pays in USD)
9) 2% of Retirement Viacom https://markets.businessinsider.com/bonds/4_850-viacomcbs-bond-2034-us92553paz53 5.83 % Yield (Pays in USD)
10) 2% of Retirement Catepillar - https://markets.businessinsider.com/bonds/caterpillar_finservices_corpdl-notes_201718-20-bond-2020-us14912hts93 8.32% Yield (Pays in USD)
11) 2% Mortgage backed security AAA rated - https://markets.businessinsider.com/bonds/5_400-abn-amro-bank-bond-2026-xs0592463136 5.4 % Yield (Pays in NOK) - this is awesome because oil should spike back up in December, which means the currency conversion should rise in December and payments are 1x per year
12) 1% South African Bonds (Gives you exposure to gold) - https://markets.businessinsider.com/bonds/south_africa-_republic_of-bond-2040-zag000125980 - 10.21% Yield (Pays in ZAR [South African]- - this is awesome because the ZAR currency should go up longer term due to gold, likewise it has a potential to double as ZAR is at a historical low
13) 2% - USA treasury bills very safe - https://markets.businessinsider.com/bonds/united_states_of_americadl-flr_notes_201820-bond-2020-us912828y537 - 6.4% Yield (Pays in USD)
14) 2% Burmingham, Alabama debt - https://markets.businessinsider.com/bonds/3_500-birmingham-city-of-bond-gb0000993211 - 11.14% Yield (Pays in British Pound) - Pound likely to go up to 40% value in next few years.
15) 2% China government debt - https://markets.businessinsider.com/bonds/china-_peoples_republic_of-Bond-2022-hk0000116407 - 8.69% Yield (Pays in Chinese currency) - This currency likely to increase by about 20% long term
16) 2% Clavas Securities PLC Debt - https://markets.businessinsider.com/bonds/clavis-securities-bond-2032-xs0302269096 - 6.9% Yield (Pays in Euro) - This currency will likely increase 30-50% long term
17) 2% Hypo Vorarlberg Bank AG Debt - https://markets.businessinsider.com/bonds/hypo_vorarlberg_bank-Bond-2020-at0000a10gb9 - 8.79% Yield (Pays in Euro) - This currency will likely increase 30-50% long term
18) 2% Bank of nova scotia - https://markets.businessinsider.com/bonds/bank_of_nova_scotia-_thedl-notes_201520-bond-2020-us064159gw01 5.44% Yield (Pays in USD)
19) 2% Canadian Railyway - https://markets.businessinsider.com/bonds/4_000-canadian-pacific-bond-ca136447ax71 - 9.59% Yield (Pays in GBP)
20) 2% New metro global - https://markets.businessinsider.com/bonds/dl-notes_201818-22-bond-2022-xs1839368831 - 8% Yield (Pays in USD)
21) 2% NordLB (German Bank) - https://markets.businessinsider.com/bonds/norddeutsche_landesbank_-gz-nachrdl-ihss1748_v1424-bond-2024-xs1055787680 6.48% Yield (Pays in USD)
22)2% French Investment Bank - https://markets.businessinsider.com/bonds/soci%c3%a9t%c3%a9_g%c3%a9n%c3%a9rale_sadl-flr_nts_201621-und_regs-bond-usf43628c734 - 6.57% Yield (Pays in USD)
23) 1% - https://markets.businessinsider.com/bonds/pyxus_international_inc-bond-2021-us018772as22 - 79.67% Yield (Pays in USD( - Junk Bond, they will need to pay you even if they go bankrupt, but I don't see any bad news)
24) 2% -https://markets.businessinsider.com/bonds/raiffeisen_bank_intldl-flr_med-term_nts_1520_90-bond-2020-at000b013628 - 10.37% Yield (Pays in USD)
25) 2% Interdevelopment Bank - https://markets.businessinsider.com/bonds/inter-american_dev_bankdl-flr_med-term_nts_201520-Bond-2020-us45818wbh88 - 5.45% Yield (Pays in USD)
26) 2% - African Development Bank - https://markets.businessinsider.com/bonds/african_development_bankdl-flr_med-t_notes_201620-Bond-2020-us00828ebs72 - 5.25% Yield (Pays in USD)
27) 2% - https://markets.businessinsider.com/bonds/swedbank_hypotek_abdl-mortg_cov_mtn_201520-bond-2020-xs1231116481 - 19% Yield (Pays in USD)
28) 2% - https://markets.businessinsider.com/bonds/skandinaviska_enskilda_bankendl-med-term_nts_201520_144a-Bond-2020-us83051gad07 - 14.13% Yield (Pays in USD)
29) 2% barclays Investment Bank - https://markets.businessinsider.com/bonds/0_077-barclays-bank-Bond-2021-xs0126504421 - 13.11% Yield (Pays in USD)
30)2% Swedbank - https://markets.businessinsider.com/bonds/swedbank_hypotek_abdl-mortg_cov_mtn_201520-bond-2020-xs1231116481 - 19.77% Yield (Pays in USD)
31) 2% - https://markets.businessinsider.com/bonds/golden_wheel_tianhldgs_coltddl-notes_201821-bond-2021-xs1751017218 - 14.39% (Pays in USD)
32) 2% - https://markets.businessinsider.com/bonds/china_evergrande_groupdl-notes_201919-22-bond-2022-xs1982036961 - 13.02% (Pays in USD)
Stocks - 32% Of money could be technically in safe haven assets that could provide a 2% return while we wait for the stock market to finish crashing + there are some deals trading less than NAV:
1) 1% - Buy EWEM (barely dropped and less than NAV) - safe
2) 2% - Buy RAVI (barely dropped and less than NAV) - 2% Yield safe
3) 2% - Buy GSY (barely dropped and less than NAV) - 2% Yield safe
4) 2% - Buy CYB (barely dropped and less than NAV) - 2% Yield safe
5) 2% - Buy LDRI (barely dropped and less than NAV) - 2% Yield safe
6) 2% - Buy MBSD (barely dropped and less than NAV) - 3% Yield safe
7) 2% - Buy SCHO (barely dropped and less than NAV) - 2% Yield safe
8) 2% - Buy AGZ (Government agency bond etf backed by federal government) - 2% Yield safe
9) 2% - Buy GNMA (barely dropped and less than NAV) - 2% Yield safe
10) 2% Buy LGOV (barely dropped and less than NAV) - 3% Yield safe
11) 2% Buy PHDG (Good ETF) - Safe
12) 2% Buy CBON (barely dropped and less than NAV) - 3% Yield safe
***Stocks 1-10 you hold onto until the market hits bottom, but sell when ready to buy other stocks*****
13) 1% - Buy BTAL (Good ETF) - Hold onto this long-term dont touch it
14) 1% - Buy FUT (Good ETF) - Hold onto this long-term dont touch it
15) 1% - Buy EMTY (Good ETF) - Hold onto this long-term dont touch it
16) 1% - Buy CLIX (Good ETF) - Hold onto this long-term dont touch it
17) 1% Buy DLBR (Good ETF) - Hold onto this long-term dont touch it
18) 1% Buy IVOL (Good ETF) - Hold onto this long-term dont touch it
19) 1% Buy FUT (Good ETF) - Hold onto this long-term dont touch it
20) 1% Buy GLDI (Good ETF) - Hold onto this long-term dont touch it
~~~~~~~~~~~~~~~~~
Some interesting purchases, when the market bottoms would be:
1) Specifically Home Depot and XOM
2) Airlines will go back up too keep an eye out as well as hotels + cruise ships
As of August 2nd, the portfolio is up about 50%, and interestingly enough the federal reserve bought all of those bonds after the dip because flight to safety dictates in market panics everybody sells all assets (that's why basically almost everything crashes outside of some options and short positions) - so it's important to properly diversify and this was one of the few ways we thought you could, and it looks like it played out for the best! The bond etfs we selected we back-tested and saw they barely moved in other stock market panics.
Interest rates are technically going to eventually go negative because millennial's are not having children and the US GDP shrank by 30%+, so that means the fed will keep printing money and making the rates low, which means people who have stable jobs can take on debt because the money is almost free - just ensure that money is used for investments associated to your risk tolerance levels.
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