Comments on: A Buck, A Yen, A Mark or A Pound http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/ Learning and sharing investment knowledge. Thu, 04 Dec 2008 20:52:01 +0000 http://wordpress.org/?v=2.0.4 by: Viagra online stores. http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-439502 Tue, 24 Jun 2008 19:43:57 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-439502 <strong>Viagra online stores....</strong> Viagra online stores.... Viagra online stores….

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]]> by: CrossProfit http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2163 Mon, 17 Jul 2006 12:38:36 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2163 The basics of devaluation in fairytale format... http://occult-advances.org/nc-eco-coming-devaluation-us-dollar-currency.shtml Enjoy! By the way, since the horrific devaluations of the WW II era the Yen and the Mark have appreciated in value with relation to the U.S. Dollar, not devalued. CrossProfit http://www.crossprofit.com The basics of devaluation in fairytale format…

http://occult-advances.org/nc-eco-coming-devaluation-us-dollar-currency.shtml

Enjoy!

By the way, since the horrific devaluations of the WW II era the Yen and the Mark have appreciated in value with relation to the U.S. Dollar, not devalued.

CrossProfit
http://www.crossprofit.com

]]> by: frugal http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2084 Thu, 13 Jul 2006 16:43:43 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2084 Just a little correction to my comments. The best time is probably earlier than 6 months. Maybe in late August to mid-October. I expect a high in $US to coincide with a low in US equity market. Both events will be driven by pause in the US interest rate hike. At that point, I expect an accelerated fall in $US. By the way, another negative for foreign bonds is that their interest rates are MUCH lower compared to $US, whether it's Yen or Euro And since the bond value is more affected by the <b>relative</b> interest hike than absolute interest rate increase, you get hit by that more. The mutual fund that I sold was BEGBX which had a lot less US treasury bonds compared to most "international" (which could include US) mutual funds. And it's also unhedged, I believe. Just a little correction to my comments. The best time is probably earlier than 6 months. Maybe in late August to mid-October. I expect a high in $US to coincide with a low in US equity market. Both events will be driven by pause in the US interest rate hike. At that point, I expect an accelerated fall in $US.

By the way, another negative for foreign bonds is that their interest rates are MUCH lower compared to $US, whether it’s Yen or Euro And since the bond value is more affected by the relative interest hike than absolute interest rate increase, you get hit by that more.

The mutual fund that I sold was BEGBX which had a lot less US treasury bonds compared to most “international” (which could include US) mutual funds. And it’s also unhedged, I believe.

]]> by: Dan http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2071 Wed, 12 Jul 2006 22:47:24 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2071 frugal: That's true - the protection they provide you is against a drop in the dollar vs. the other currencies. Depending on the rates of the bonds and their duration, in a period of rising rates the fund will likely break even at best. Dan frugal:

That’s true - the protection they provide you is against a drop in the dollar vs. the other currencies. Depending on the rates of the bonds and their duration, in a period of rising rates the fund will likely break even at best.

Dan

]]> by: frugal http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2068 Wed, 12 Jul 2006 21:27:05 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2068 Hi Dan, Actually international bond funds may not be that good for the coming 6 months. The reason is that we are in a global rate hike cycle. In an interest rising environment, the value of bonds tend to get cheaper. Although short term rate doesn't directly translate into long term rate, nevertheless, it has an effect. I just sold my international bond a couple of months ago, and it was barely returning anything. frugal Hi Dan,

Actually international bond funds may not be that good for the coming 6 months. The reason is that we are in a global rate hike cycle. In an interest rising environment, the value of bonds tend to get cheaper. Although short term rate doesn’t directly translate into long term rate, nevertheless, it has an effect.

I just sold my international bond a couple of months ago, and it was barely returning anything.

frugal

]]> by: Dan http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2060 Wed, 12 Jul 2006 05:05:38 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2060 The disadvantage of a metal ETF is that it is a fund. You're trusting that the fund manager actually bought and is safely storing the gold. For some of the "staunch" gold investors, gold is the ultimate defense against total collapse of the economy. In such a case, the "survivalist" mentality would suggest that the fund owner might go bankrupt, out of business, or the managers grab the gold and hide out in their luxury villiages in Zurich (or wherever they would go). Or the government might confiscate it somehow. In any case, their feeling is that nothing matches having gold in hand (or stored under a matress, buried in the yard, or in a similar secure repository). From a pure financial perspective, holding coins cost a bit more to trade (insured shipping, retail markup, etc.), but does not incur the management fees of a fund. Some also invest in gold mining companies - whose price tends to track the price of gold, but is also dependent on the operation and success of the mine as a business. The disadvantage of a metal ETF is that it is a fund. You’re trusting that the fund manager actually bought and is safely storing the gold.
For some of the “staunch” gold investors, gold is the ultimate defense against total collapse of the economy. In such a case, the “survivalist” mentality would suggest that the fund owner might go bankrupt, out of business, or the managers grab the gold and hide out in their luxury villiages in Zurich (or wherever they would go). Or the government might confiscate it somehow.
In any case, their feeling is that nothing matches having gold in hand (or stored under a matress, buried in the yard, or in a similar secure repository).
From a pure financial perspective, holding coins cost a bit more to trade (insured shipping, retail markup, etc.), but does not incur the management fees of a fund.
Some also invest in gold mining companies - whose price tends to track the price of gold, but is also dependent on the operation and success of the mine as a business.

]]> by: Vince http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2056 Wed, 12 Jul 2006 03:44:43 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2056 I won't pretend to know about gold or gold ETFs -- not my area of expertise. But I've heard rumblings from staunch gold investors who are very much opposed to investing in precious metal ETFs. Do you have any perspective on that? What are the advantages or disadvantages? I won’t pretend to know about gold or gold ETFs — not my area of expertise. But I’ve heard rumblings from staunch gold investors who are very much opposed to investing in precious metal ETFs. Do you have any perspective on that? What are the advantages or disadvantages?

]]> by: Doug http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2052 Tue, 11 Jul 2006 23:14:39 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2052 With regard to stocks as a hedge, I think you need to separate inflation from a dollar decline. Certainly, a dollar crisis would results in higher inflation. It would also involve higher interest rates which would crush both bonds and stocks, as discount rates rise and reduce, in present value, the value of the future cash flows. This is why, during the inflation of the 70s companies saw rapid profit growth, but stocks stagnated as their P/Es fell to 7 in the recession of 1982. Bonds were yielding 13%. Stocks with significant foreign operations, (especially stocks of companies that do lots of exports from the US) should hold up under a dollar devaluation, however, because their earnings, when translated into dollars would adjust for the devaluation. At a minimum, their intrinsic values should remain roughly constant (export pricing advantage might even allow for market share gains that would improve intrinsic value). Though, you are right, in a panic, all stocks could suffer. This would then be a good buying opportunity. With regard to stocks as a hedge, I think you need to separate inflation from a dollar decline. Certainly, a dollar crisis would results in higher inflation. It would also involve higher interest rates which would crush both bonds and stocks, as discount rates rise and reduce, in present value, the value of the future cash flows. This is why, during the inflation of the 70s companies saw rapid profit growth, but stocks stagnated as their P/Es fell to 7 in the recession of 1982. Bonds were yielding 13%.

Stocks with significant foreign operations, (especially stocks of companies that do lots of exports from the US) should hold up under a dollar devaluation, however, because their earnings, when translated into dollars would adjust for the devaluation. At a minimum, their intrinsic values should remain roughly constant (export pricing advantage might even allow for market share gains that would improve intrinsic value). Though, you are right, in a panic, all stocks could suffer. This would then be a good buying opportunity.

]]> by: Chris http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2031 Tue, 11 Jul 2006 02:40:58 +0000 http://www.investorgeeks.com/articles/2006/07/11/a-buck-a-yen-a-mark-or-a-pound/#comment-2031 I really like the idea of foreign bonds. I just don't know about the whole idea of protecting cash from inflation. It poses an opporunity cost when viewed against long-term returns of other investment classes, such as stocks and real estate. Over the long term, stocks and real estate are good inflation hedges, and have tax benefits bonds do not. One of the problem of TIPS funds is that the income is taxed at your current tax bracket which for many is 25-28%. This means that you're actually losing around 1% ever year after taxes. This is a fine solution for your IRA though. See this article: http://www.fool.com/retirement/retireeport/2000/retireeport000626.htm I really like the idea of foreign bonds.

I just don’t know about the whole idea of protecting cash from inflation. It poses an opporunity cost when viewed against long-term returns of other investment classes, such as stocks and real estate. Over the long term, stocks and real estate are good inflation hedges, and have tax benefits bonds do not.

One of the problem of TIPS funds is that the income is taxed at your current tax bracket which for many is 25-28%. This means that you’re actually losing around 1% ever year after taxes. This is a fine solution for your IRA though.

See this article:
http://www.fool.com/retirement/retireeport/2000/retireeport000626.htm

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