Market tranquility in the madness

Checking in on the Dolce Far' Niente portfolio

The idea of Dolce Far’ Niente portfolio was to create a low-risk portfolio for today’s market conditions that you don’t constantly need to monitor and fret about. We might go in once or twice a year and re-allocate, but for the most part we do nothing.

It’s now seven weeks since its inception, so I thought I would check in on it today and see how it’s doing. I’ll use October 1st as a start date (it was actually a few days before, but Oct 1 is cleaner).

1. Gold (15%)

We have a sizeable allocation to gold for reasons which don’t need spelling out here.

It is up 8%, and looking good (read more about gold’s promising technicals here).

Many of you are based in the UK, and so use pounds to buy your gold. Gold in sterling has gone from £1,510/oz to just shy of £1,600/oz, so it is up about 6%.

(My guide to investing in gold is here. If you are looking to buy gold, let me recommend the Pure Gold Company, with whom I have an affiliation deal).

2. Bitcoin (5%)

The potential of bitcoin is so extraordinary I see the risk is not so much owning it, but not owning it.

This is one of those times when I wish the allocation was more than 5%. It will not always be that way. It’s up 31%.

Our vehicle to play bitcoin via a UK-broker, and circumvent/satisfy ill-conceived-FCA regulation, is to own Nasdaq-listed Microstrategy Inc (NasdaqGS:MSTR). Microstrategy is up over 50%. Going great guns.

You can read more about it here.

3. Oil & Gas (10%)

I don’t think the oil story is even close to being over. There has not been enough investment, and we are consuming more and more of it, so I am treating the recent fall in oil prices as typical annual volatility. Crude oil has come down about 9% since October 1st.

The iShares Oil and Gas ETF (SPOG.L), one of our primary vehicles by which to invest, can be our proxy. It is down about 4% over the period.

Shell (SHEL.L) is another proxy, and it is flat.

You can read more about how to invest in oil here.

4. Uranium (5%)

The supply squeeze in uranium that we were warning about in August seems to be happening, and the uranium price is going great guns. There is no need to take on the risk of a capital-draining uranium producer that will not see any production for 15 years, when you can own the metal itself. Our vehicle is Yellow Cake (YCA.L), which I have been saying one should own since it listed in 2019 at 200p.

It’s up 5% since October 1st and, at 580p, close to all-time highs.

5. Bonds and Wealth Preservation (20%)

I’ll use Ruffer (RICA.L) and Capital Gearing (CGT.L) as the proxies here. Both are flat over the period, so I won’t post charts. (Dr John recently covered Capital Gearing as one of the four trusts he is buying now).

Other vehicles by which to invest in bonds can be found here.

6. Special Situations (10%)

This is the really speculative/fun/risky/painful part of the portfolio.