Monday, June 14, 2021. I had a reader question me about my level of cash… and I knew in one sense, I was “caught with my pants down,” in the sense that I really, simply, did not know for a certainty what my actual asset allocation was… so, I accepted the personal challenge to find out just what it REALLY was. And here is that real-world tally.
This is either really good… or it is really bad. But in either case, it seems to be working perfectly well for us right now. The wife and I are 1.) 41.03% cash, 2.) 16.71% cryptos, 3.) 18.58% precious metals in its various forms, 4.) 6.56% the metal commodity Iridium, and all of 5.) 17.11% common dividend-paying stocks, which in actuality isn’t really too very much at all, as I can now plainly see.
So, what should I conclude from this exercise? I want to hold right where I am. Our 1.) cryptos, should they launch hard in the near future, (and they’ve already better than tripled in less than one year), might actually make us wealthy. Our 2.) precious metals, in all its various forms, are simply all about practical ‘insurance’ in incredibly uncertain times. Our 3.) Iridium position has also more than tripled in less than 6 months, and we want to hold until at least 1 year has passed for the lower cap gains tax. And, finally, our 4.) safe-dividend growing common stocks are not only producing stellar portfolio dividend income growth, but it would appear that their capital appreciation is also beating the market… which is not at all unusual, as those safe-dividend growers that raise their dividend by more than 10% also have this incredible penchant for creating the “dividend magnet effect,” whereby safe-dividend growers have this powerful tendency for pulling their share price up by an amount similar to their regular annual safe-dividend growth… and if that increase is in any sense greater than the price appreciation of the market… so, to that same extent, does the share price of our holdings rise greater than the market average!
Since capital growth is by no means our first concern, and since, also it will have to be the cryptos and the metals that will have to make up the bulk of our future capital growth, as I strongly suspect they will, I feel incredibly comfortable and confident that we are right in that place that we want to be… and, I would not be interested in changing a thing right now.
If anything, this exercise in determining what our actual asset allocation is tells me that we are in a very good place, and that, if anything, I should wait for a considerable stock market smash, and put a goodly amount of cash to work in more shares of our safe-dividend growing shares. What is anyone else thinking at this time?
Harold F Crowell