How to decide whether it is worth it to hedge currency exposure when investing outside of your home country. Topics covered include: How currency exchange rates impact investment returnsWhat factors impact currency exchange ratesWhat are carry trades and how do they influence exchange ratesHow currency forward contracts workHow ETFs and funds hedge currency exposureWhat to consider when deciding whether to hedge foreign currency exposure Show Notes Rising U.S. yields push yen … [Read more...]
283: Why You Should Care About Carry Trades
How investors make money with carry trades, how central banks encourage such trades, and what are the dangers to financial markets and the economy when carry trades get too big. What Is a Carry Trade? Carry trades are investments in which the investor collects an income stream “as long as nothing happens,” as Tim Lee, Jaime Lee and Kevin Coldiron describe in their book The Rise of Carry. By nothing, the authors mean there is price stability in the underlying asset on which the carry … [Read more...]
275: Are You Over Diversified?
Is it possible to be too diversified in your investment portfolio and how can you tell? Why Warren Buffet thinks diversification is protection against ignorance. In this podcast episode you’ll learn: The skills you need to be able to select individual stocks.How have active managers outperformed relative to passive indexing products.How much diversification is too much and a test to determine if one is over diversified.What is factor investing and which factors have worked over … [Read more...]
100: Navigating a Negative Carry World
What Harrison Ford can teach you about investing and living in a radically unpredictable, low investment return world. Photo by Fortune Live Media In this episode you'll learn: What is the primary narrative driving markets today.What are the two things that never change with markets.What is positive and negative carry.Why central banks implement negative interest rates.How low are interest rates around the world.How do we invest and live in a radically unpredictable, negative carry … [Read more...]
