Protect Yourself from the Falling Dollar

[ShokWaveRider]

I read this and thought it was worth sharing. I for one am always worried about the state of the greenback. As I travel between countries often and it seriously effects my cost of retirement.

http://money.cnn.com/2006/06/15/pf/d...0607/index.htm


SWR

[macdaddy]

I'm looking at the Bank of Montreal (BOM). I wanted some more banking exposure anyway and it seems to be correlated with the canadian dollar and at a low right now. So as the US dollar falls, BOM's assets, div yield and/or share price rise. If this is a mistake, somebody jump in and stop me.

[brewer12345]

Quote:

Originally Posted by macdaddy I'm looking at the Bank of Montreal (BOM).* I wanted some more banking exposure anyway and it seems to be correlated with the canadian dollar and at a low right now.* So as the US dollar falls, BOM's assets, div yield and/or share price rise.* If this is a mistake, somebody jump in and stop me.

Prolly OK, but I guess I am happier with expousures I can actually hope to understand. There is no way I would possibly be able to nail down enough of the things that go on in a $27Bln USD market cap bank.

[PsyopRanger]

I just recently started hedging against the dollar buying investments and trusts using Euro, franc’s and the Canadian dollar. Buffet has been doing it for the past few years.

My bank in here in Italy offers a CD at 5% in Euro, can’t remember the length though?

[macdaddy]

Do you need an account at a european bank to buy those? If so, is there a cheap way to do that. The portfolio I have to balance is already 80% fixed income so I need to put more money in stocks (hence BMO.. BOM=typo).

[brewer12345]

I just use GIM (closed end fund run by Templeton). Real short duration (like 2) basket of non-US fixed income, mostly investment grade.

[macdaddy]

GIM seems to be close to flat over the last 2 years, a period during which I thought the dollar fell in value relative to foreign currencies... are there other factors that impact its price? or am i missing something.

[brewer12345]

Quote:

Originally Posted by macdaddy GIM seems to be close to flat over the last 2 years, a period during which I thought the dollar fell in value relative to foreign currencies... are there other factors that impact its price?* or am i missing something.

Check out the yield over the last couple of years. GIM pays monthly coupons based on the interest received on the bonds, plus a distribution of realized capital gains at the end of the year. Total return has been pretty attractive.

[PsyopRanger]

Quote:

Originally Posted by macdaddy Do you need an account at a european bank to buy those? If so, is there a cheap way to do that. The portfolio I have to balance is already 80% fixed income so I need to put more money in stocks (hence BMO.. BOM=typo).

Your account needs to have access to other exchanges (Toronto, Frankfurt) to access some of these investments.

Most brokerages and fund houses also have foreign offices and may be able to offer there investments in Euro, etc.

I have the Dow Jones Global Titans 50 SM EX in Euro as a hedge against the dollar.

There is also this company http://www.investoffshoredirect.com/Default/About_Us

But I am not sure of there credibility?