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Post by chang on Feb 5, 2024 11:33:26 GMT
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Post by yogibearbull on Feb 5, 2024 12:33:47 GMT
Japan is among the most cyclicals of the global markets. It peaked in 1989 at 38,915, and may hit an all-time high this year.
However, currency effects are very strong - yen is very weak as the BOJ has stayed easy for far too long.
For 2023,
Nikkei 225 +28.24% (copies DJIA; better is TOPIX)
EWJ +20.32% (unhedged)
DXJ +42.00% (hedged)
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Post by FD1000 on Feb 5, 2024 13:37:45 GMT
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Post by anitya on Feb 5, 2024 17:15:22 GMT
Starting to think if there is a strong case for not hedging currencies inn international investing? Seems like there are more reasons to currency hedge than not? No?
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Post by chang on Feb 5, 2024 21:13:32 GMT
Starting to think if there is a strong case for not hedging currencies inn international investing? Seems like there are more reasons to currency hedge than not? No? I never hedge currencies. I don't think currency movements are predictable, so I take what comes as an additional factor in diversification, that probably washes out in the long run. When a currency is at an historic weak point, like the yen is now, I certainly would not hedge. |
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Post by FD1000 on Feb 5, 2024 21:29:25 GMT
Starting to think if there is a strong case for not hedging currencies inn international investing? Seems like there are more reasons to currency hedge than not? No? I never hedge currencies. I don't think currency movements are predictable, so I take what comes as an additional factor in diversification, that probably washes out in the long run. When a currency is at an historic weak point, like the yen is now, I certainly would not hedge. +1 Years ago, Michael J. Hasenstab (TPINX) was the king of hedging, he lost his clothes for years now. Predicting interest rates is another tough call. Gundlach also lost his clothes. |
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Post by anitya on Feb 5, 2024 21:40:03 GMT
Starting to think if there is a strong case for not hedging currencies inn international investing? Seems like there are more reasons to currency hedge than not? No? I never hedge currencies. I don't think currency movements are predictable, so I take what comes as an additional factor in diversification, that probably washes out in the long run. When a currency is at an historic weak point, like the yen is now, I certainly would not hedge. All export driven economies have an incentive to depreciate their currency. The opposite is true for import driven economies, such as the US. A strong dollar is an unwritten US Govt policy so the disgruntled can buy stuff on the cheap. Compare any hedged vs unhedged ETF pairs over any buy and hold time periods. With a few exceptions, I think the hedged fund should come out ahead. I can start you off with FMIJX vs FMIFX. |
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Deleted
Deleted Member
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Post by Deleted on Feb 5, 2024 21:55:44 GMT
Some guy on TV thinks if usd depreciates then it will help US multinationals specially Tech.
Also someone said us small cap should do well based on how cheap they are but small cap earnings have been declining so not till earnings start improving...
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Post by roi2020 on Feb 6, 2024 8:33:19 GMT
I prefer not to hedge currencies in foreign equity funds.
Currency movements in developed countries should not materially affect returns over longer periods¹.
Also, there are costs associated with hedging.
The following M* article about currency hedging is informative.
www.morningstar.com/etfs/currency-exposure-dilemma-foreign-investing
¹ short-term impact can be significant.
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