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Reply to @scott: Really? I would think it provides an opportunity to get some protection, perhaps because may have less correlation to other options. But, if you do not like, I'm less excited. So, why "No"?
I really believe that straight-up betting on which fiat currency is the "least dirty shirt" this particular week is futile in this environment, especially with so many nations going after a "beggar thy neighbor" policy. I also find it a little questionable if retail products can be nimble enough to play the rapid movements of the currency markets.
If Michael Hasenstab is going to use currency bets as an aspect (and has shown skill doing so) of Templeton Global Bond (TEGBX), that's one thing. However, take the example of Merk Absolute Return Currency (MABFX), which has not been highly correlated to the markets since its start, but not in a real good way, as the return has been, well, absolutely negative. That's not to say that Merk isn't an intelligent manager - I think he is - but what is purely investing in currency movements these days, aside from waiting for the next rumor, intervention or other gimmick?
I think people have to be globally diversified, but I think people have to be globally diversified in real assets. I absolutely understand the need for protection and quite like non-correlated assets and strategies, but I'd look elsewhere for it, as I question whether betting on currencies is "protection", in the shorter term and especially over the longer term.
I'd rather go for an incredibly boring, "bond-like" stock that offers a yield (J & J, for example) and products that everyone continues to need. Or I'd rather suggest a small allocation to precious metals. (CEF or any number of methods.)
Comments
Good stuff.Break, break. I'll defer to Scott's opinion, like always.
I really believe that straight-up betting on which fiat currency is the "least dirty shirt" this particular week is futile in this environment, especially with so many nations going after a "beggar thy neighbor" policy. I also find it a little questionable if retail products can be nimble enough to play the rapid movements of the currency markets.
If Michael Hasenstab is going to use currency bets as an aspect (and has shown skill doing so) of Templeton Global Bond (TEGBX), that's one thing. However, take the example of Merk Absolute Return Currency (MABFX), which has not been highly correlated to the markets since its start, but not in a real good way, as the return has been, well, absolutely negative. That's not to say that Merk isn't an intelligent manager - I think he is - but what is purely investing in currency movements these days, aside from waiting for the next rumor, intervention or other gimmick?
Things like this:
http://www.zerohedge.com/news/2013-02-12/usdjpy-slammed-after-g-7-official-says-statement-misinterpreted
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/02/20130212_JPY_1.jpg
I think people have to be globally diversified, but I think people have to be globally diversified in real assets. I absolutely understand the need for protection and quite like non-correlated assets and strategies, but I'd look elsewhere for it, as I question whether betting on currencies is "protection", in the shorter term and especially over the longer term.
I'd rather go for an incredibly boring, "bond-like" stock that offers a yield (J & J, for example) and products that everyone continues to need. Or I'd rather suggest a small allocation to precious metals. (CEF or any number of methods.)
...But that's just me.