These days, diversification is pointless. You only need one position in your portfolio – because all the markets are trading together.
To illustrate this point, check out this chart of the S&P 500 vs. the Dollar Index since Spring 2008:
The dollar and S&P – mirror images of one another (click to enlarge).
(Source: Google Finance)
So while we may be in uncharted investment waters, really all you need to ask yourself is – do I want to throw my lot with dollars, or with everything else?
The obvious answer is “everything else” – I mean, what’s not to like about gold, oil, and equities? Everyone knows the dollar is doomed anyway!
And that, dear reader, is what gives me great pause about that side of the trade!