Debra J. Diamond's  Instablog

When we manage portfolios, we don't like to get fancy. Investing doesn't have to be complicated or complex. If you don't understand it, you probably shouldn't own it.

Here's a portfolio comprised mainly of low cost ETF's that we like for the intermediate to long term. The investment strategy is simple and focused, to hedge against inflation and dollar devaluation. We subscribe to the concept that the best ideas are also the simplest. 

Here are the 2 components:

Structure:

20 equal weighted positions (since we don't know in advance which ones will be the winners) and since this gives us good diversification.

Investment Focus:

Global markets with above average long term growth potential,

Positions selected to hedge against inflation and dollar devaluation.

That's it!

We like ETF's for low cost. There are several relatively new niche ETF's that fit the bill including MENA Frontier Power Shares (PMNA) which corresponds to the Middle East North Africa Index and the Market Vectors Gulf State ETF( MES). We also like the Claymore Ocean Tomo Patent ETF (OTP), 300 companies with the highest patent ratings (intellectual property over industrial materials), Power Shares Global Agriculture (PAGG), which mirrrors the NASDAQ Ag Index (also beneficiaries of long term global demand growth), IYT(The Dow Jones Transportation Index ( as business picks up companies like JB Hunt, Fed Ex will benefit). That makes 5 of our 20 positions.

Next we continue to  recommend the International ETF's, and currencies including the Chinese yuan, the Singapore dollar, the South African Rand and the Indian Rupee, iShares China (FXI), Hong Kong(EWH) Singapore (EWS), South Korea (EWY) or Taiwan (EWT). Add long positions in gold futures and oil futures. If you buy these, make sure that you deleverage your investments by putting up at least 50% margin. Go out to the April '10 contracts.

This adds another 11 positions. Invest $50,000 in each position and don't buy it all at once. Try for 3 bites.

Keep some powder dry for new ideas that will take us up to our 20 positions.