OK, not really, but I think it will be useful to measure, going forward, the effectiveness of a wealth preservation strategy vs. a dollar-denominated economic investment strategy.  To that end, I'm going to track a number of key statistics.

In the wealth preservation corner, we have silver, gold, and consumable commodities (energy, foodstuffs, etc.)  As a proxy for consumable commodities, we'll use the commodity fund I referenced yesterday, the PowerShares DB Commodity Index Tracking Fund (ticker DBC).  Our 'wealth preservation fund' will be 25% gold, 25%, silver, and 50% DBC.

In the dollar-denominated economic investment strategy corner, we have the stock market.  For this fund, we'll use a blended average of the Dow, Nasdaq, and S&P 500 indexes.

We're going to mark the funds to the close of business yesterday.  As there was sufficient time to enter a position after the Fed announcement made it clear that they were going to go the full-retard debasement/inflation route, this makes sense.  Because of the structure of the funds, it will be easiest to start with an amount that is divisible by both 3 and 4, so we'll give each of them $12,000 fake internet dollars.

Going forward, I'll post the performance of the funds and their components every Friday.  This is much, much simpler than trying to manage an active portfolio and is a much better approximation of what the average person can do to try to preserve their wealth.

Ladies and gentlemen, place your bets.  I'm going all-in on the wealth-preservation portfolio.  Unless and until the Fed is forced to change their policies, I think this is a no-brainer.  If, at some point in the future, the Fed is forced to stop driving the short bus over the cliff, we can revisit the issue of fund composition.  Until then (and God only knows when that might be), there will be no changes.

We're at the starting line, and here are our marks:

Posted by: Hermit Dave at 12:17 PM | No Comments | Add Comment
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