Investment ideas

I just received some tips from an anonymous source about investment ideas in an attempt to thrive in the upcoming economic downturn. Nothing too surprising but worth a read...

DECENT INVESTMENT CHOICES:
- TIPS bonds (Treasury Inflation-Protected Securities) These are bonds that are adjusted for the CPI. Thus, with massive infalation, these will rise accordingly (Todd's note - keep in mind that the CPI excludes energy and food, which are the things that will go up the most. Also, keep in mind that the government may default on its bond obligations, just as so many third world countries have done when their leaders did equivalently stupid things that ours are doing).

- Gold - hedge against inflation and major down turn. See prior post. Note that there are new ETFs who buy bullion.

- Oil - esp. oil services companies. Find the very best ones in their respective areas, such as offshore drilling, drilling technologies, discovery experts, etc.

- Alternative energy, esp. wind. (Todd's note - now is an excellent time to get into alt energy companies. They have not gone up as you think they might have. In fact, I think they may be doing worse than regular companies).

- Real estate (Kunstler says owning land will be the same as having wealth)

- China & India

- Zero coupon bonds to hedge against deflation (in case that happens instead of massive inflation)



THINGS TO AVOID:
- Being in cash
- Being in any bonds except TIPs bonds
- Most stocks, but esp cosmetics, foods, retail, airlines, autos, and chemicals (I could think of more:
a. insurance - no one will buy it since cash will be so tight
b. financial services - folks will have a lot less $$ to invest in 401ks et al. Same goes for institutional investment.
c. construction & building development - everything here relies on oil in one way or another )