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  • June 7, 2008 at 10:34 AM #12976
    waiting for bottom
    Participant

    So I am pretty convinced that the USD will continue to fall and the US economy and market will be in the tank big time for the next 5 years.

    I plan to move 60-75% of my investments into overseas investments. I already use ishares to invest in emerging markets (EEM) plus Asia, Brazil, and Japan.

    I am, however, new to the foreign currency holding ETFs. I like that they hold actual currency and pay a decent dividend (FXE, FXB, FXA, etc.). This seems like the easiest way to invest in foreign currencies. I do all of this through E*Trade and want to avoid a firm that will take a decent cut like EuroPacific.

    Are there any hidden risks to the FXx funds that I need to know about other than the obvious investment risks?

    June 7, 2008 at 12:10 PM #218961
    barnaby33
    Participant

    I can’t give you any specifics about FXE or FXY, though I have held both. I can say be very careful on currency trading. Those are the smartest guys in the room.

    What makes you think the dollar will continue to weaken?

    Josh

    June 7, 2008 at 12:10 PM #219122
    barnaby33
    Participant

    I can’t give you any specifics about FXE or FXY, though I have held both. I can say be very careful on currency trading. Those are the smartest guys in the room.

    What makes you think the dollar will continue to weaken?

    Josh

    June 7, 2008 at 12:10 PM #219104
    barnaby33
    Participant

    I can’t give you any specifics about FXE or FXY, though I have held both. I can say be very careful on currency trading. Those are the smartest guys in the room.

    What makes you think the dollar will continue to weaken?

    Josh

    June 7, 2008 at 12:10 PM #219071
    barnaby33
    Participant

    I can’t give you any specifics about FXE or FXY, though I have held both. I can say be very careful on currency trading. Those are the smartest guys in the room.

    What makes you think the dollar will continue to weaken?

    Josh

    June 7, 2008 at 12:10 PM #219051
    barnaby33
    Participant

    I can’t give you any specifics about FXE or FXY, though I have held both. I can say be very careful on currency trading. Those are the smartest guys in the room.

    What makes you think the dollar will continue to weaken?

    Josh

    June 7, 2008 at 12:17 PM #219058
    Fearful
    Participant

    I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

    One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

    June 7, 2008 at 12:17 PM #219128
    Fearful
    Participant

    I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

    One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

    June 7, 2008 at 12:17 PM #219076
    Fearful
    Participant

    I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

    One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

    June 7, 2008 at 12:17 PM #218966
    Fearful
    Participant

    I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

    One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

    June 7, 2008 at 12:17 PM #219109
    Fearful
    Participant

    I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

    One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

    June 7, 2008 at 12:34 PM #218981
    sakina96
    Participant

    While the dollar my continue to fall some I think you are a bit late to the party. You may also want to do a little more research…I’ve heard that as of December 2007 dividends are taxed as regular income and not as capital gains.

    June 7, 2008 at 12:34 PM #219144
    sakina96
    Participant

    While the dollar my continue to fall some I think you are a bit late to the party. You may also want to do a little more research…I’ve heard that as of December 2007 dividends are taxed as regular income and not as capital gains.

    June 7, 2008 at 12:34 PM #219124
    sakina96
    Participant

    While the dollar my continue to fall some I think you are a bit late to the party. You may also want to do a little more research…I’ve heard that as of December 2007 dividends are taxed as regular income and not as capital gains.

    June 7, 2008 at 12:34 PM #219091
    sakina96
    Participant

    While the dollar my continue to fall some I think you are a bit late to the party. You may also want to do a little more research…I’ve heard that as of December 2007 dividends are taxed as regular income and not as capital gains.

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