Unless you have really been active in managing your IRA, it probably has taken a hit the past year. It may be time sell those "Blue Chips", your FA so heavily invested you in and start looking else where.
Since these will be "investments", its important to look 5-10 years down the line. What can expect in 5-10 years. Let's be optimistic too, so we can say that China, India some of Europe and even the United States more then likely will recover from the depression. If we don't recover in 5-10 years, then you will have a lot more to worry about then "How are the assets in my IRA".
1. Play the overall market- "But Piker I don't want to get crushed again". That's fair, buthere are less volatile safer ways to play the market. One way which I like is to use Closed End Funds. These are basically mutual funds that are traded in the open market. The benefits of these are they have good payouts, low volatility and most of them are trading well below their NAV(Net Asset Value).
I think a great way to use these funds are to seek a "Growth and Income" fund, and re-investing the dividend, into the fund. These funds have a high-payout and are cheap. So if the market keeps moving down, you are adding to your position and it is not costing you additional money. Once the market goes up again, you will have had used the dividend to build your position.
For instance look at CII(Black Rock Enhance Capital and Income Fund)
Currently the stock is trading at 10.00, it is trading a discount of 16% and paying out a distribution of 19.62%.
So let's look at it:
Buy 100 Shares at 10.00(it closed 3/31 @ 9.99)=$1,000
Distribution rate=19.62% paying .485 per quarter= 100 shares of CII * .485(4)=$193/year.
If the share price, does not change at all you are getting around 6.6% a year. (That's not bad)
So you have a 6.6% cushion if the stock declines. But you also have another cushion. This stock's Net Asset Value is really as of 3/30= $11.80. So if you bought it today, and the fund went belly up, you would be sold at $11.80.
Now even if the market goes down, you are dollar cost averaging each quarter and since the stock is price low and the payout is high, you will be accumulating shares not just .005 shares if you went a ETF i.e SPY.
Some other funds for this type of investment are: GAB, ADX, TY, USA, BLU
To me these funds are a safe play. Make sure you pick a fund at has a good amount of assets in it, that it is not leveraged and it is at a discount.
There are countless CEF you can use. Go to www.etfconnect.com to find a fund suited for you.
2. Oil and Interest rates- Let's be honest we can't keep interest rates at 0% forever(although Ben and Co. would love too) and if the economies recover demand for oil will increase. So a great way to play this is through Oil Royalty Trust. A good thing about this sector is as oil goes up so does the dividend and also when interest rates go up so will the dividend
PBT- is a good example of this it has a dividend yield of 3.4% but at one point was paying .23 a month, when oil had peaked.
Other stocks in this sector are
SBR- 7.22% yield
HGT- 6.0%
So show your IRA some loving, it's taken a beating worse then Apollo Creed in Rocky IV.
Of course THIS IS NOT INVESTMENT ADVICE! IT'S JUST AN IDEA! PLEASE SEEK A PROFESSIONAL AND A FUND PROSPECTUS IF YOU WANT TO INVEST IN THESE COMPANIES! DO YOUR OWN RESEARCH AND DON'T GO BLINDLY INTO THE NIGHT BECAUSE I SAID SO. THAT WONT MAKE YOU MONEY! IT WILL LOSE YOU MONEY, Then your wife will get pissed and hate you, you will start drinking more, then your out one night you make a few bad decisions with a stripper name Candy, next thing you know your wife asks you to move out, your kids hate you, you start wearing the same close to work and shower less and you and you get the picture!
