Advertisement
Markets

A Stock-Free Portfolio

Given the goings-on in the market, we understand if you're reluctant to buy common stocks. But you can make a decent return without owning a single share.

GOLD (5%)

The yellow metal doesn't pay any income, and it's plenty volatile. But it's a good defense against inflation -- which will surely rear its head when business picks up steam -- and the likelihood of a weaker dollar down the road. With iShares Comex Gold Trust (symbol IAU), you can track the price of gold without having to buy the stuff and store it. It recently traded at $90 per share.

Advertisement - Article continues below

CASH (25%)

With yields generally at less than 1%, cash is trash nowadays. But you won't lose money on your cash investments, and their yields will pick up when the economy recovers and the Federal Reserve begins to lift short-term interest rates. (For ideas on how to invest your no-risk money, see Where to Stash Your Cash Now.)

PREFERRED SHARES OF REAL ESTATE INVESTMENT TRUSTS (15%)

REIT preferreds, like REIT common stocks, have been clobbered this year. As a result, they are delivering extraordinarily high yields. For instance, preferred shares of both Alexandria Real Estate Equities and Corporate Office Properties trust recently yielded 11%, and a Duke Realty preferred yielded 14% (for more suggestions, see A Real Estate Play That Pays).

TAX-FREE-INCOME (15%)

Although interest from municipal bonds is generally exempt from federal income tax, many high-quality munis are yielding far more than Treasuries of like maturity. Some AAA-rated tax-free bonds to consider: Puerto Rico 5.5% general-obligation bond due in 2019. Yields 4.7% to maturity. New Jersey 5.25% transportation bond due in 2022. Yields 4.0% to maturity. University of Texas 5.25% revenue bond due in 2022. Yields 4.0% to maturity.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

ENERGY (15%)

Thanks to the recession, oil and natural-gas prices have plunged. But those prices have fallen too far and will almost certainly rise when global economies recover. Two exchange-traded funds -- U.S. Oil Trust (USO) and U.S. Natural Gas Fund (UNG) -- follow these commodities and will appreciate when oil and gas turn up.

BLUE-SHIP IOUS (15%)

These days, high-quality corporate bonds sport unusually generous yields (see Best Buys in Bonds. We found a few that pay well, can't be called before maturity and aren't issued by financial firms: Wal-Mart 5.875% bond due in 2027. Yields 5.6% to maturity. Rated AA by Standard & Poor's. Eli Lilly 7.125% bond due in 2025. Yields 5.4% to maturity. Rated AA. Northern States Power 7.125% bond due in 2025. Yields 6.2% to maturity. Rated A.

HIGH-YIELD CORPORATE BONDS (10%)

Yes, junk bonds are speculative, but they're yielding gazillions more than Treasury securities of the same maturity. That's a risk worth taking with a small portion of your money. Funds are the best way to buy junk bonds. Good choices: Payden High Income (PYHRX), recently yielding 10%, and Vanguard High Yield Corporate (VWEHX), also yielding 10%.

Advertisement

Most Popular

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)
tax deadline

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)

Between due dates for IRA or HSA contributions, paying estimated taxes and other deadlines, there's more to do by July 15 than just filing your federa…
July 10, 2020
Know Why Your Credit Score Changes: 9 Money Moves to Consider
credit & debt

Know Why Your Credit Score Changes: 9 Money Moves to Consider

Your credit score is a key indicator of your financial well-being and of the risk you pose to lenders. How good is yours?
July 10, 2020
65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020

Recommended

Closing Bell 7/13/20: This Is Your Market on (Coronavirus) Drugs
Markets

Closing Bell 7/13/20: This Is Your Market on (Coronavirus) Drugs

A rapid rally to start the week, sparked by encouraging vaccine news from Pfizer and BioNTech, collapsed in the afternoon.
July 13, 2020
Closing Bell 7/10/20: Gilead Gives Stocks a Booster Shot
Markets

Closing Bell 7/10/20: Gilead Gives Stocks a Booster Shot

Stocks rallied out of negative territory Friday after Gilead announced that remdesivir helped reduce COVID-19 mortality risk in a clinical trial.
July 10, 2020
2020 Stock Market Holidays and Bond Market Holidays
Markets

2020 Stock Market Holidays and Bond Market Holidays

Is the market open today? Take a look at which holidays the stock markets and bond markets take off in 2020.
July 10, 2020
Closing Bell 7/9/20: Another Split Market as Jobs Concerns Grow
Markets

Closing Bell 7/9/20: Another Split Market as Jobs Concerns Grow

A mounting list of planned playoffs weighs on stocks Thursday, though Big Tech manages to hoist the Nasdaq up to another record high.
July 9, 2020