The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments

URL:  https://boards.fool.com/you-may-find-that-if-you-stick-with-usd-and-are-21740548.aspx

Subject:  Re: Euro savings? Date:  12/11/2004  1:41 PM
Author:  activeREinvestor Number:  11403 of 36651

You may find that if you stick with USD and are expecting to retire to USD the gains you could make on USD investments will be just fine.

That is questionable given most US asset classes are at or near historic highs.


Two comments.

If you think US assets are at historic highs then you must also believe that many assets in many countries are also at highs. The property market in many countries is an example. There is a lot of cash out there looking for a decent return and interest rates are at historic lows globally (some specific exceptions).

If all asset classes are at historic highs then you need to sit on the sidelines or find a better way to hedge the risk.

This discussion is mostly about why being in or out of the USD is a way to help produce better returns. I was taking the view that if the person's future liabilities are in USD then they may be able to do just fine with US investments while not taking on the FX risks. If you expect the USD to drop significantly while see very little appreciation then maybe non USD is good (some extra overheads need to be factored in).

Putting this on a firmer footing...

If you can produce 12% annual returns in the US market (locked in for the term of the investment) is there much added advantage to looking outside the US? No FX exposure, no foreign owner hassles. If you could get 12% locked in with a foreign investment then it might be a more interesting comparison. I only know how to lock in 12% in the US right now so my bias is there (BTW - I live outside the US and hold different currencies already).

John
Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us