Bolling: Obamanomically Correct

Some have been hit harder than others. But it feels bad to all of us. Just knowing that we are not alone in this downturn eases the pain, anger, embarrassment or whatever emotion we are experiencing. Seasoned veteran traders are trying to figure things out, so small investors should take heed and wait out this market turmoil.

We have a new president now. We should be good Americans and support Barack Obama whether you think he is good or bad for the markets and the economy. He is our commander-in-chief and has earned that much.

The purpose of this column is to discuss ways to protect investments in tough times and maximize profits in good times. It is clear that we are in the former. So, I have (week after week) told you to remain nimble, liquid and as free from risk as possible. That means no new substantial positions have been recommended here lately. In fact, the portfolio has been running about 5% risk and 95% Treasuries for a while. That has served us well during massive moves in the indexes, many of them down.

Time to Dip In a Little

While doing due diligence scouring stocks, investments, bonds, etc. for the big thing, I have added some positions to my portfolio. I re-entered the SPDR Gold Trust (GLD Quote) trade and U.S. Oil Fund (USO Quote) trade. I am buying these exchange-traded funds and will add to them if the prices of gold and oil start to firm.

My thinking is that after the dust settles and the world realizes that the Democrats in the U.S. Congress, Senate, and White House will spend substantially more than promised during their campaigns, we will reflate. The beneficiaries of reflation are gold and oil as well as other physical commodities. I am steering clear of equities that produce the oil and mine the gold because I am concerned about the tax treatment they may be burdened with in a new era of Washington tax-and-spend politics.