What to Invest In During the Debt Crisis

Roger Nusbaum has a good blog at www.randomroger.blogspot.com that was highlighted in one of Money magazine's Best of issues.  On Friday, he wrote a good article on how to handle investing in regards to the debt ceiling crisis in Washington D.C.  The ideas came from David Rosenberg of Gluskin Sheff through another blogger Barry Ritholtz at http://www.ritholtz.com/blog/2011/07/rosie-7-investment-strategies-for-recession/:

1) “High-quality corporates” plus companies with “A-type” balance sheetsand “BB-like yields.”

2) Reliable dividend paying Stocks (including preferreds).

3) Low debt-to-equity ratios, high liquid asset ratios, good balance sheets, no heavy debt.

4) Hard assets: Oil and gas royalties, REITs – focus on income stream.

5) Sectors / companies with “low fixed costs, high variable costs, high barriers to entry/some sort of oligopolistic features, a relatively high level of demand inelasticity.” This includes utilities, consumer staples + health care.

6) Alternative assets that do not rely on “rising equity markets” or are independent of volatility trades.

7) Precious metals. Specifically, he puts a $3,000 target on Gold.
 
Roger's specific post can be accessed here.