The 5 Key Asset Classes

Our investing philosophy revolves around the fact that during a full economic cycle, a proper mix of various uncorrelated asset classes needs to be considered for the construction of a portfolio. No matter what financial innovation brings us in the form of digital currencies and tokens, the 5 basic building blocks of any portfolio are:

1. CASH - hard currency; Useful for paying taxes and debts; The one against which every other asset is benchmarked against;

2. TREASURIES - government or corporate issued debt; Pays a fixed coupon; The bearer has the first claim on assets in the case of bankruptcy;

3. COMMODITIES - the stuff you need to make other stuff from; Physical in nature; Usually mined, farmed, or otherwise produced from a natural resource;

4. EQUITIES - risk assets; Directly tied to the financial performance of a company; Can be publicly traded or private;

5. GOLD - the wild card; Substitute for cash in times of distress and also tied to the commodity cycle; Uncorrelated to anything else.

In order to gain exposure to these asset classes in financial markets, we need to fit each category with a suitable proxy. We use the most liquid ETFs as benchmarks:

• CASH: The US Dollar / UUP Invesco DB US Dollar Index Bullish Fund

• TREASURIES: TLT iShares 20+ Year Treasury Bond ETF

• COMMODITIES: DBC Invesco DB Commodity Index Tracking Fund ETF

• EQUITIES: SPY SPDR S&P 500 ETF

• GOLD: GLD SPDR Gold Shares ETF