Selling PFUIX - W.C. Varones

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11.23.2011

Selling PFUIX

A couple years ago, I posted Advice to a young man on supporting a mistress, recommending a basket of investments as protection against dollar debasement. The basket has performed very well since, led by silver, gold, and the GDX gold miner ETF. The laggards have been foreign equities: VEA, EWA, SWISX, and VWO. Stick with them. They all yield more than five-year Treasuries, and some of them yield more than 10- and 30-year Treasuries.

I still like this diversified basket, and I am continuing to dollar-cost average into these asset classes. One exception is the bond fund I mentioned, Pimco Foreign Equity Unhedged (PFUIX). It has performed well, but I think it is time to dump it. The fund invests heavily in European debt and bond futures, and with Europe facing the choice between printing and default, neither is likely to be good for Euro bondholders.

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