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<p>[QUOTE=&quot;Morgan1878, post: 805014, member: 17869&quot;]A good observation......in synch with mine..</p><p><br /></p><p>Paul McCulley, the chief economist of PIMCO wrote last year that this year&#039;s market resembled a school cafeteria where nothing looked all that appetizing.</p><p>So defensive seems to be a good strategy because there isn&#039;t any asset class that&#039;s going to score a home run, since most of them were priced up in last year&#039;s market. </p><p><br /></p><p>Personally, I have 75% of my retirement in an <i>extremely</i> diversified world asset allocation mutual fund. Symbol is PAUAX. One of the unusual features of this fund is that the manager can run a &quot;short&quot; position that can be as much as 20% of the fund. He&#039;s currently running around 16.5%. The S&amp;P was <i>down</i> over 3% on Thursday, but this fund was <i>up</i> about .7% due to the &quot;short&quot; position. </p><p><br /></p><p>In 2008, when the market was getting creamed to the tune of <i>minus</i> 35%, this fund was down only 7.5%. In 2009, you would have completely erased that deficit since it was up over 18%. For most of 2009, the manager did not employ a short position.This fund pays a quarterly dividend.</p><p><br /></p><p>It&#039;s conservative in nature, which suits me since I&#039;m at the point where I will not have enough years to ride out any serious roller-coasters that could severely damage my portfolio. For 2010, I would be happy with a 5% return.</p><p><br /></p><p>Since I have now gone so far off topic that this thread could only be seen by a Hubble telescope, I&#039;ll reel in a bit and say that the only reason I&#039;m holding on to a 5% position in Gold is simply for &quot;insurance&quot;. There is a level of uncertainty regarding any number of potentially catastrophic occurrences that could undo the markets. Since I think uncertainty will hang around indefinitely,&nbsp; </p><p>I&#039;ll stick with this PM allocation regardless of the daily swings in price.[/QUOTE]</p><p><br /></p>

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