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Out Of Mind » DINARIAN SCAMTASTIC NEWS » RV/GCR, GURU CHATTER & NESARA INFO » RV/GCR Chatter ~ 4/22/2016

RV/GCR Chatter ~ 4/22/2016

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1 RV/GCR Chatter ~ 4/22/2016 on Fri Apr 22, 2016 10:18 am

PurpleSkyz

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Understanding Your Exposure to Currency Values

4/22/2016 06:51:00 AM  News  

The Paper Trail: Understanding Your Exposure to Currency Values


https://conversations.wfmagazines.com/article/understanding_your_exposure_to_currency

Including foreign currency in your portfolio helps add a global flavor to a portfolio, but be aware of how a changing market can turn an opportunity into a challenge.

If you think about foreign currency only when you're getting ready to head overseas on a trip, you may be missing out on a significant opportunity to diversify your assets.

"Foreign currency can perform several functions toward structuring an efficient portfolio that traditional asset classes cannot," says Mark Merkel, Director and Senior Foreign Exchange Specialist for Wells Fargo Foreign Exchange Solutions Group in Charlotte, North Carolina. Here, he outlines those functions and what to keep in mind when considering making investments in foreign currencies.

Currency pros

The benefits of having currency in your portfolio boil down to two key points: diversification and yield. "Foreign currencies can provide diversification and exposure to other economies to achieve a truly global portfolio for the new global economy," explains Merkel.

So, when your domestic assets aren't performing, foreign denominated assets, like stocks and bonds, may perform, while also providing exposure to commodity and manufacturing-based economies. This type of exposure may also improve your chances of higher cash and bond yields, while investing in actual currency (as opposed to assets) may allow you to secure low-cost capital, which could be invested in higher-yielding assets abroad.

Currency hedging is a technique that may be used to seek to reduce the risk arising from the change in price of one currency against another.

Tracking changes in domestic and international policy

Comprehending currency markets means stepping back and taking a look at the big picture of U.S. and other global economies as well as understanding how the interplay of currencies against each other impacts your potential profits.

For example, take the current state of monetary policy based on economic progress. On one hand, the U.S. emerged in relatively strong shape from the financial crisis, and the Federal Reserve has embarked on a course of fiscal tightening by beginning to raise interest rates and completing liquidity and recapitalization programs, Merkel says.

On the flip side, the rapid pace of growth during the past 10 years in the emerging and commodity-based economies is cooling.

"GDP growth is dropping, unemployment is rising, and inflation — with the exception of hyper-inflationary economies such as Brazil, Argentina, Venezuela, or even Russia, for example — is virtually nonexistent," says Merkel. While economic growth doesn't always correspond directly with equity returns, it's often a major factor.

In more developed regions, such as the Eurozone, opportunities may remain, as the asset outlook is more positive. It's always important to consider, however, your time horizon and desire for diversification when investing in multiple markets.

"Foreign currency can perform several functions toward structuring an efficient portfolio that traditional asset classes cannot." — Mark Merkel, Director and Senior Foreign Exchange Specialist, Wells Fargo Foreign Exchange Solutions Group

Currency hedging to lessen volatility concerns

While having currency as part of your portfolio has its potential benefits, it's critical to be aware of how a changing market can turn an opportunity into a challenge.

When an asset must be converted from foreign currency to U.S. dollars, weakness in the foreign currency can erode any possible gains. Let's say you purchased European equities and bonds for your portfolio when the Euro was trading at $1.40. If you want or need to liquidate that portfolio now, with the Euro only being worth about $1.10, that 20 percent depreciation in the Euro versus the U.S. dollar over the course of your investments could wipe out any investment gains in your portfolio — or even result in your losing money due to currency volatility.

Currency hedging is a technique that may be used to seek to reduce the risk arising from the change in price of one currency against another. For U.S. investors, this strategy is most often used to hedge a foreign equity investment during times when the dollar is expected to gain strength against that other currency. The dollar's composite value has decreased against major currencies since the 1970s so, over the long term, a currency hedge in an equity position may not be successful. But during times when the dollar is gaining strength, such as 1995-2002 or the current period that started in mid-2011, a hedge position on equity may add value. Investors must think about their time horizon and ability to react to changing environments when considering such a strategy, because changes in whether the dollar is gaining or losing strength against other currencies can often happen quickly. The use of hedging to manage currency exchange rate movements may not be successful, could produce disproportionate gains or losses in a portfolio, and may increase volatility and costs.

Bonds generally are not correlated with currency exchange in the same way as equities, so a currency hedge on foreign bonds may be more efficient over time, as it may reduce risk and increase risk-adjusted return.

The way forward

As interest rates and yields diverge, explains Merkel, global liquidity will begin moving more toward safety and performance — likely, the U.S. dollar. If you've been diversifying globally in foreign bonds for higher yields and asset appreciation, you may find yourself in a defensive position as these investments mature and need to be repatriated back to the U.S. dollar.

"Foreign bond yields are decreasing and creating risk in global fixed income markets," says Merkel. "We believe the U.S. dollar will continue to gradually strengthen, creating risk for the repatriation of foreign-denominated assets."

WRITTEN BY
Sarah Tuff Dunn


Thanks to: http://inteldinarchronicles.blogspot.com



 

2 Re: RV/GCR Chatter ~ 4/22/2016 on Fri Apr 22, 2016 10:21 am

PurpleSkyz

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MILLIONDAY


Article quote:  "The US ambassador to Iraq...said in an interview...that "the economic reforms the Iraqi government began its effects appear to increase non-oil imports," noting that "the continuation of the Iraqi government in this performance will contribute great in the elimination or reduction of the budget deficit."  THE IMF IS MOVING FORWARD WITH A LOAN DUE TO PROGRESS ACCORDING TO THIS...THEY ARE WORKING ON THEIR GDP --

THIS WILL IMPROVE THE COUNTRY BECAUSE IT IS WHAT IS THE BACKBONE OF THE ECONOMIC REFORM AND THEIR ENTRY TO THE MARKET IN THE GLOBE -- THEY ARE TALKING ABOUT TRADE MOVING FORWARD, IT WILL REQUIRE THE INTERNATIONAL EQUATION THAT THEY WERE ORDERED TO COMPLETE -- FAIR TRADE.  




THE IMF HAS GIVEN A FORMAL RELEASE TO MOVE IRAQ TO ARTICLE 8 AND IT IS ON THE FORMAL WEB SITE OR AT LEAST IT WAS ---

THEY WILL NEED TO HAVE PRICING AND ALL TRADE EQUAL AND COMPETITIVE -- WE HAVE NO GUESS OF WHAT THAT WILL BE BUT THE RATE THEY HAVE NOW AND THE PRICING IS ALL FROM THE IMPOSED RATE -- WHAT THEY COME OUT AT PRICE WISE WILL HAVE TO BE AT A VALUE THAT COMPETES IN THE MARKET -- ONE WAY OR ANOTHER --- ECONOMICS GLOBALLY REQUIRES A CALCULATION THAT ALL COUNTRIES ARE REQUIRED TO HAVE -- THAT IS HOW THE VALUE OF THE DOLLAR AND ALL CURRENCIES ETC ARE DECIDED -- THE GLOBAL PRICING INDEX. 

Article quote:  "Finance Minister Hoshyar Zebari, on Monday, with a kilo Honda Executive Vice President of Multi-Agency of the World Bank Investment Guarantee parties, the possibility of bringing many of the financiers and investors to the Iraqi market." 

THIS IS ALL ABOUT THE ACTIVATION OF THE ECONOMIC REFORM...ENTRY INTO THE CAPITAL MARKETS...THE SALE AND EXCHANGE OF THE DINAR...

THIS IS THE FORMAL MEETING TAKING PLACE TO MOVE IRAQ FORWARD AND THEIR MARKET AND THE DINAR...WHOOOPOW. 

 KNOW THIS MEETING IS VERY FORMAL...VERY MAJOR... IT IS THE MEETING OF ALL THE MOST INVOLVED IN GLOBAL ECONOMICS -- WHAT WE HAVE HERE IS -- WASHINGTON SAYING THAT IMPORTS BEYOND OIL ARE PICKING UP IN IRAQ ---

THE STOCK EXCHANGE BEING WORKED FOR SUCCESSFUL GLOBAL ENTRY AND WE HAVE THE MEETING WITH ALL PLAYERS GOING ON RIGHT NOW. 



Thanks to Ponee at: http://www.dinardaily.net



 

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