February 2nd, 2023
After a dismal 2022 for investments, due to war, COVID, supply chain issues, high inflation, and rising interest rates, the sun has peeked out of the clouds and given buy signals for various investments.
For reference, look at this MarketWatch article, This ‘crazy’ retirement portfolio has just beaten Wall Street for 50 years. The sub-heading gives away the meaning:
This strategy beats the market with less risk, fewer upsets and no ‘lost’ decades
Brent Arends, MarketWatch
Here at smilingdad, we’ve embraced this strategy. We are layering into the 7 investments mentioned when a buy signal is given. We want our money to grow, with less risks and less bumps. Our recent Pokémon article showed the S&P 500 has returned 5% a year for the last 26 years, before accounting for inflation.
“You can (if you want) build AANA for yourself using just 7 low-cost ETFs: For example, the SPDR S&P 500 SPY , iShares Russell 2000IWM , Vanguard FTSE Developed MarketsVEA , abrdn Physical Gold Shares SGOL , a commodity fund such as the iShares S&P GSCI Commodity-Indexed Trust ETF GSG , the iShares 7-10 Year Treasury Bond ETF IEF , and the Vanguard Real Estate ETF VNQ .”
MarketWatch
The famous S&P 500 is close to a buy point. We’ve sold all our S&P 500 investments and replaced them with international funds, small and mid caps. The 6 reasons? We started a post on it, but stopped, because it made us so angry.
- Many S&P 500 companies support election deniers – AT&T tops the list, https://projects.propublica.org/fortune-500-company-election-deniers-jan-6/
- Oil companies lied to the public on climate pollution for decades, raking in trillions. Exxon made $56 billion in profits, BP Shell $40 billion, Chevron $36.5 billion, only in 2022.
- Facebook and Twitter put profits over democracy
- Big banks fund oil investments. https://cleantechnica.com/2023/01/22/how-the-worlds-largest-banks-are-funding-fossil-fuel-companies/amp/
- Amazon and Starbucks are anti-unions and labor organizing
- Large banks made their money from the slave trade https://www.pbs.org/newshour/amp/world/yellen-visits-historic-site-of-slave-trading-post-off-the-coast-of-senegal
The smallest 2000 companies in the US are represented by the Russell 2000 index. This index gave a buy signal this past January.
The VEA fund is massive, with 4062 stocks in the index. This index gave a buy index at 2022 year end.
A surprising part of AANA is the use of physical gold. Central banks bought more than 1000 gold tons last year. With the Fed slowing down rate increases, gold will do well. Gold gave a buy signal late last year.
From eftdb on GSG:
Crude oil, natural gas, and other energy commodities make up close to 70% of the exposure, meaning that metals and livestock are under-represented in this products. GSG is essentially a cross between a pure energy ETF such as DBE and a more broad-based commodity fund such as DBC or USCI. We don’t see GSGas a tremendously useful product; those seeking energy exposure would be better off in an oil ETF, while those seeking balanced commodity exposure should gravitate towards DBS or USCI.
eftdb
A sell signal for GSG was given in 2022. There are new ETF’s that are investing in resources needed for the renewable energy revolution. Those or a broader commodity exposure seem like better choices.
Part of the AANA investments is exposures to long term bonds. This ETF gave a buy signal recently.
As we covered earlier, REIT’s took a nasty fall in 2022 due to higher interest rates. A buy signal for VNQ is close. We have substituted VNQ for OPI, which offers a higher yield and has maintained their dividend for years.
Bitcoin has not given a buy signal. Given the electricity required to run it (some clean sources, some dirty) and it’s environmental impact, we continue avoiding Bitcoin, and crypto generally, given the scandals last year.
We have investments in IEF, IWM, VEA, SGOL, and OPI. The key to AANA is re-balancing to an equal amount at the start of every year.
We wish our Chinese readers a Happy Lunar New Year, and the remaining readers a great 2023 and beyond. Maximize your health and enjoyment.
Sincerely yours,
smilingdad
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