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Pittsburgh-based planner Robert Hapanowicz recommends the PIMCO CommodityRealReturn Strategy Fund and the exchange-traded fund GSG. (Exchange-traded funds—ETFs—are mutual funds that trade like stocks.) GSG tracks the S&P GSCI Commodity Index, which currently has a 75 percent stake in oil and gas. The Dow Jones AIG Commodities index is better diversified, says Jeffrey Ptak, head of Morningstar's ETF analysis, with only 35 percent in oil and gas. His pick: iPath DJ-AIG Commodity Index Total Return exchange-traded notes. (Warning: the notes, which are debt obligations rather than funds, carry high fees.)

Real Estate Investment Trusts are another great diversifier. REITs more than tripled in price from January 2000 to February 2007, then lost 25 percent in a hurry. They've picked up a bit in the past few weeks and currently sell at a median 12 percent discount to the estimated value of their properties, says Jason Lail of SNL Financial Research, with dividends in the 6 percent range. There's a hard road ahead for commercial real estate but, hey, you're supposed to buy stocks when they're low.

Don ' t chase the gold price. Gold is a bet against the dollar. If its price adjusts for inflation since 1980, it should eventually run to $2,000 an ounce from $930 today, says Chris Laird, editor of PrudentSquirrel.com. You'll almost certainly lose, however, if you try to buy and sell as the market churns up and down. Either make gold a permanent part of your portfolio or leave it alone. Gold stock mutual funds reflect the performance of mining companies, not gold itself. Gold bugs should consider ETFs such as StreetTracks Gold Trust or iShares Comex Gold. (Warning, from planner Steven Medland at TABR Capital Management in Orange, Calif.: gains on gold ETFs are taxed at 28 percent, not the usual 15 percent.)

Tax-free municipal bonds are paying more than taxable Treasuries. That makes them great buys. If interest rates rise, they should lose less in value than other bonds, says Mark McCray of PIMCO, specialists in fixed-income securities, while still paying a decent income.

For debtors, three little words: It's all over. Lenders want to see your cash.

Reporter Associate: Temma Ehrenfeld

© 2008

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  • Posted By: ghostdogwarrior @ 07/09/2009 9:34:14 PM

    Hey there Tootsie, Im just checking in to see how yu are doing.. How is that BUY commodities and HOLD for 15 years working out for ya? Last time we chatted I thnk the market was at 11K? How did it feel to slide down that splinter of a railing to 6K? Ouch that musta hurt butt good... Im wondering if you bailed yet or are still HOLDING... Im betting you dumped out in March? Per my blog you can see I got all my readers long on March 1st...

    If you didnt enjoy the last ride.. you are going to hate this one.. because we are just about to start (Sep +/- 1 month) the next major leg down. I hope you are smarter this time but somehow I just dont think.. Old habits die hard and if you its only your clients that are dying what do you care..

    Ghostdog

  • Posted By: ghostdogwarrior @ 09/30/2008 7:44:13 PM

    It;s good that people like you exist because it makes it so much easier to make money for traders. In case you didnt see we had a commodity bubble which is headed to deflation with the outside possibilty of hyperinflation, and the fact that you could not see it is an indictment of your knowledge of the markets. its completely irresponsible to suggest commodities to people who have never taken a short position in their life and even sillier that you make your money off of telling people to buy and hold for 12 to 15 years. Wow... How insightful. You know I picked up the comics today and Charlie Brown said good grief.. I never saw that coming. I havent figured out whether people like you that bottom feed off the masses are greedy or just ignorant. I tend to think both based on the fact that our country is in its current state of financial crisis because of that potent combination. Get educated and provide a real service to people which falls somewhere outside "invest in commodities" and hold your stocks for 12 to 15 years (Per your Jim Leher comments). In case you dont know, that wasnt a bear market in 1992 or 2001 like you said, that was a correction. We are IN a bear market NOW. Learn it, Know it, Live it.

    Ghostdog

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