I've always been a fan of what are now called "alternative investments" and never really cared as much for "generic index style equities", although I have owned them of course. Property, commodities, gold and higher yield instruments were always more interesting to me once I began to understand how imbedded inflation really was in the modern world.
Now that I am retired and living on my money, my "business" is to generate income as a goal more important than capital gains. Increasingly I am working on the great divide between tax-deferred and taxable accounts in the US, now and for the future. Perhaps we should call them "totally taxable" and "partly taxable" accounts since every penny one takes out of the IRA or 401K is taxable while only gains and dividends and interest are taxable from the taxable accounts. To take gold as an example, I'll want to own gold and gold stocks (CEF, GDX, RGLD,SLW) in the taxable accounts and own the high yield Gabelli buy/write (GGN) gold stock fund in the tax-deferred accounts. For oil I'll want aggressive growth petroleum stocks for the taxable accounts and the high yield oil and gas and pipeline funds in the totally taxable tax deferred accounts.
In yield vehicles this dichotomy is also important. In the taxable accounts it's important to limit taxes on interest, and I have used Vanguard municipal bond funds for this. Fearing rising rates in munis for several reasons, I have long since moved almost completely to the very short term end with VWSUX which is only about one year in average duration. It is only paying about 2.3% right now, but that makes it nearly 3.4% compared to taxable short term vehicles. Have you noticed what TBills are paying now?
In the tax-deferred accounts I have also been looking at and owning "buy/write" funds beyond GGN. Many of these are closed-end stocks although there are a few open-end mutual funds (HSGFX) which do the same things. All of these along with everything else got smashed last winter and in March this year due to margin calls and dumping by hedge funds who had leveraged these funds up greatly with borrowed money. I started moving into these funds very slowly before and after the lows in bits and pieces. Many were yielding over 20% annualized on November to March market values and were selling far under net asset values.
The "buy/write" approach has been used for generations by wealthy people to increase the yield of their stock portfolios. You own a portfolio of blue chip stocks and then consistently write covered call options above current prices. You collect the dividends and the premiums for the sold options. You are limiting your potential gains if the stock rises, but your income stream is good. It's better when market volatility is high, but that usually means that stocks are going down, so you can lose that way.
