This chart compares USDNOK versus USDEUR (the backwards way of looking at the euro in relation to the greenback).As you can see, NOK has outperformed the euro dramatically (the chart shows that the dollar is down 4% against NOK and down 1.5% against EUR).
I tend to get preachy about foreign exposure into countries that have different economic makeups than the US with this chart being a microcosm of why. The dollar has had an extreme move of late and exposure to Norway has given a better tailwind than available from a euro-based economy, like the ones that dominate iShares MSCI EAFE (EFA).
In the same time period, the Aussie (another one I prattle on about) has done a touch better than NOK. This guarantees nothing for stock returns as my Norwegian stock has done very well but my Australian stock has lagged slightly YTD but it makes the job of portfolio construction easier.
This is not about gaming a currency swing trade (if those two terms even go together?) but assessing that conditions are generally favorable for a particular currency and that a portfolio could benefit from a modest exposure. This is not very complex but will become very important over the lifetime of anyone's portfolio.
10 comments:
Roger,
Is this "advice" better than your call to lighten up on emerging markets? Let's hope so......because emerging markets have gone pretty much straight up in the past year, as you have lightened up....
To sum, your short term calls are not good......
OK, so you don't believe in rebalancing, fair enough. Kind of dumb but fair enough.
So you are taking comments about foreign investing as a short term call? Hmm, also odd but OK.
Feel free to actually sign your posts and to start making "calls." Then everyone will know how smart and talented you are.
Wow. If this guy is so smart, why does he need your advice? Why does he read your blog? People that want to make these kind of comments should at least identfy themselves. Roger, thanks for sharing your thoughts. They are often thought provoking.
Oh, so now the call was to "rebalance"? That is convenient. Perhaps you could go back to review your rationale for selling emerging markets.....it was about valuation.
Actually I do believe in rebalancing Rog baby. Funny, in this recent bit of advice on NOKy you fail to mention anything about rebalancing or asset allocation...
signed,
an investor who thinks roger is full of hotair
anytime I have ever made comment about people adding 1+1 and getting 11, I'm thinking of this sort of comment. There was no call in this post. Whatever post you are referring to I invariably said what I was doing and why as a function of sharing process. I've never not been in emerging markets.
While I can tell this is difficult for you to understand we can all look forward to your "making calls" right here and you can sign them an investor who thinks roger is full of hotair.
What is your call this week?
Roger, Speaking of hot air, how is the Arizona fire situation this year? Is the one you and Joellen fought a couple of weeks ago completely out?
This thread made me think of your willingness to put yourself "on the line" everyday in so many ways--all good, all brave, and all free.
So, back to investing, I am wondering what you think about the Indian rupee right now? Quite a recent run, but going long term against, say the Euro? I keep meaning to "look under the hood" of the India CEF, so I will go to etfconnect right now. Thanks!
The fire is out but we have had several phantom smoke calls since which always happens after a fire.
I don't follow INR very closely but it is a high yielder. Over the last six months it has gone up about 12% against USD, same as BRL. Interesting TRL and HUF (both high yieldiers) have done better than INR.
It seems to me that Everbank has some sort of product that involves INR.
I have a gut feeling that investing in India takes on a risk of fragility, for lack of a better word. A few clients have an India CEF which is obviously easy to get out of, I would not buy into a CD for India if that is the question behind the question.
I am always interested in investors opinions on what are the best of breed stocks in the various segments of the market. There is always discussion about this in terms of US stocks but very little concerning foreign stocks.My question to all out there is what do you think are the foreign best of breed stocks in eack market segment.
Roger, I don't make calls. The vast majority of advisors who make short term calls, underperform the market. Your call to sell emerging markets is a perfect example of the folly of trying to time getting out and back in.......its very hard to make both calls correctly....
I'd much perfer to stick to a fixed asset allocation approach...and for emerging markets, I'm at 12.5% of my portfolio, and have been rebalancing to that number quarterly.....
PLEASE......Answer the "best of breed" quesion. Somebody side slipped it.
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