Perhaps an alternative to cash which are perhaps bond-like in nature, at least until we know the future base-line of ‘traditional’ trading companies?
I am specifically thinking of companies such as;
Phoenix, PHNX (sector Life Insurance). This company hedges against most classifications of risk (equity valuation/interest/currency/longevity) and effectively makes it’s dividends through efficient management of their pension ‘reservoir’. There is possible growth through it’s strategic partnership with Standard Life, and purchasing annuities, which will hopefully off-set the run-off in the historical pension business.
Some would argue corporate bond degrading may cause these investment to be higher risk, but I believe Phoenix would rotate out of those bonds which have been downgraded in risk by selling them (possibly to the government?) and purchasing higher quality ones.
This company’s valuation appears to have been dragged down with other insurance and generally with UK companies, unjustifiably in my opinion, however time will tell!
IG Group, IGG, (sector Investment Banking and Brokerage Services). This company has high ROCE and margins. It is a market leader which from profits market volatility and similarly to PHNX hedges it’s risk (if it learnt it’s lesson from the Swiss Franc episode!).
The main risk with this company is regulatory, in my opinion.
To go through the other strategies;
Gold If someone is trying to trade an increase in price then perhaps gold miners would be a geared investment along these lines (both up and down!). Personally I don’t invest in gold but if I did I would probably pick a miner with the lowest production cost with decent reserves rather than the highest yield and rather than the physical element and hold in perpetuity to reduce portfolio volatility.
Tech - Yes I am invested in this area and I think it will do well for the reasons you mention.
Cash - Not one for me , if only because the odds of future inflation have been dramatically increased due to huge increases in government debt. Imo, the only the only way to hedge inflation effectively is by investing in the right companies who can increase their profits/prices in line or above the inflationary rate. To hold cash is emotionally one of the easiest things to do but not the correct in my opinion because it has low returns as an asset class and you can guarantee share prices will shoot up whilst out of the market (e.g. US tech stocks).
Quality - Yes I think this is a great idea for many reasons. In part due to the inflation comment above and also due to Charlie Monger’s ROCE comment that over the long term it is difficult to get a return over the long run without a decent ROCE and initial valuation matters less over time (provided the initial long-term investment thesis is correct!).
FTSE all-share tracker - Probably good if someone doesn’t spend much time analysing companies however there is an awful lot of dross/zombie companies are in the mix here which I would never commit capital to !!