This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What to Buy If the Sky Is Falling

This column was originally published on RealMoney on Feb. 16 at 8:15 a.m. EST. It's being republished as a bonus for readers.

RealMoney readers often ask me how to reduce exposure or correlation to the U.S. stock market, citing a litany of concerns: America's ever-growing need for foreign capital to fund its deficit; the threat of a weaker dollar; worries over higher energy prices. So it makes sense to explore ways to reduce reliance on the U.S. economy and capital markets.

Here are some ideas for a "Bomb Shelter Portfolio." Some of the concepts are rather extreme; I wouldn't recommend that anyone buy all of the investments listed below. However, a few of them could be the right way for you to create some diversification.

Most Canadian and Australian banks have a low correlation to the S&P 500. Both economies are driven by the supply and demand cycle for commodities.

Canadian Imperial Bank of Commerce (BCM) and Australia's Westpac Banking Corp. (WBK) have long track records of zigging when the U.S. zags. Additionally, both have high yields -- 3.4% and 4.3%, respectively.

If I had to choose only one, I would pick an Australian bank over their Canadian cousins because of Canada's proximity to the U.S.

While the U.S. imports much of its resources, you've probably heard that the U.S. is the Saudi Arabia of coal. While true change in the dynamics of our oil consumption is hard to visualize, it's possible that through technological innovation we could end up using more coal for home heating and powering vehicles. Consol Energy (CNX - Get Report) and Peabody Energy (BTU - Get Report) are two good proxies for the coal industry.

Is there anything more bomb shelter-like than uranium? This has been a small investing fad the last couple of years. Canada and Australia have the largest known uranium reserves: 12% and 30% of world totals, respectively.

Banking Abroad
Canadian Imperial Bank of Commerce (BCM) and Australia's Westpac Banking Corp. (WBK) have a low correlation to the S&P 500
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ATK $0.00 0.00%
BCM $23.03 0.00%
BHP $22.58 0.00%
BTU $4.24 0.00%
CCJ $12.34 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs