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No. of Recommendations: 3
Maybe it's because the calender has signaled that 'Summer' has officially begun. Or maybe it's because the past month's market action has been such a downer. But stocks are up a bit this morning for reasons I don't really understand. There isn't anything of substance that one could call "good news". Instead, we're in an inflationary/stagflationary recession and likely headed for a depression. So it's time to do some portfolio review and to maybe get defensive.

If one borrows Ben Graham's three terms --Defensive, Enterprising, Speculative-- and assigns bond ratings to them, the following schedule emerges:
 
Defensive (AAA-AA)
Enterprising (A-BBB)
Speculative (BB and lower)

No portfolio doesn't carry a bit of cash, and not every investment works out well. So let's add two more categories to that schedule.

Cash & Equivalents
Defensive
Enterprising
Speculative
Non-performing

Next comes the tricky part, assigning weightings to those five categories according to one's own specific means, needs, interests, skills, goals, and objectives. These are the weightings I favor compared to what one of my portfolios actually looks like, my margin account at ET that hold only bonds .
 
Targets: Actual:

Cash & Equivalents 0% Cash & Equivalents 7.6%
Defensive 50% Defensive 52.2%
Enterprising 33% Enterprising 28.6%
Speculative 17% Speculative 11.3%
Non-performing 0% Non-preforming 0.4%

Here are some concrete, actually held examples of each of my categories (which needn't be --and probably won't be-- the same as yours).
 
Cash equivalent? a 13-wk T-Bill.
Defensive? Tigard OR Water Sys 5's of '31.
Enterprising? Prospect Cap's 6-3/8's of '25.
Speculative? Tilray's 5's of '23 convert.
Non-performing? Venezuela's 9.25's of '27

My takeaway is this (with respect to this specific portfolio). Due to rising interest-rates, I'm getting clobbered on the prices of my bonds, as should be understood and expected. But as long as they continue to perform, I'll make the money from them that I expected to make, and I don't need to do anything. As to what I bet on Venezuela, my basis is tiny and just the cost of doing business.

So, just six more portfolios to grind through, some of which hold quite a few preferreds and ETFs, though not many stocks.

Arindam
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