Posts Tagged Currencies

Since our client portfolios are dominated at the moment by cash positions, we have to keep a careful eye on currencies to assure we don’t miss the boat. Again, the dollar will decline over the long run but the short run is a mystery which is why we slowly diversify out of dollar. If competing hard currencies such as Euro or Australian dollar and others devalue against the dollar then we will buy more of that currency to lower the average price which we purchased at…just like with equities.

www.crinvestmentadvisors.com

I often feel like I’m encouraging clients to get more involved in their day to day financial education so that they can increase their intellectual  independence and better collabate with us as financial advisors to make good decisions (which they take more responsibility for).  The most common way is through surfing the most informative financial news website but I’m becoming a believer in podcasts. They are up-to-date interviews on relevant issues and they go deep into the subject matter through the push/pull of an interview.  I find it more educational, especially for folks whom are trying to really get the arms around financial terminology and macroeconomics.  Trade-Weighted Current Account Imbalances may a bit steep but the fundamentals of macroeconomics are accessible if you get in the habit of listening to the conversation, like learning a language. I discussed the dilemnas of currency investing in recent posts.  Even for people who don’t want to touch anything that is not “hard currency”, such as the Euro, Dollar, Yen, Swiss Franc, currency allocation is an important decision.

http://en.wikipedia.org/wiki/Hard_currency

This bloomberg podcast series is excellent and listen to Axel Merck explain why the dollar will decline, significantly, over the long run.  Axel also slips between currency, global growth and the advent of China in a manner that really makes sense.

You can subscribe to these series through itunes.  Make it a habit!

http://www.bloomberg.com/tvradio/podcast/cat_economics.html

Note that Axel Merck advises to stay away from “long bonds”.  FYI