Gyroscopic Investing

Has anyone considered hedging currency risk in the PP? A rising dollar against other currencies has a negative impact on gold and US equities. I am considering UUP, which rises when the USD gains against a basket of commodities.

buddtholomew wrote: Has anyone considered hedging currency risk in the PP? A rising dollar against other currencies has a negative impact on gold and US equities. I am considering UUP, which rises when the USD gains against a basket of commodities.

I held it for two years at a loss. After I finally sold it, it went up.

Mdraf wrote:

buddtholomew wrote: Has anyone considered hedging currency risk in the PP? A rising dollar against other currencies has a negative impact on gold and US equities. I am considering UUP, which rises when the USD gains against a basket of commodities.

I held it for two years at a loss. After I finally sold it, it went up.

Did the vehicle achieve the objective of matching the performance of the dollar against a basket of currencies. Perhaps the dollar fell over the timeframe you held the instrument.

buddtholomew wrote:

Mdraf wrote:

buddtholomew wrote: Has anyone considered hedging currency risk in the PP? A rising dollar against other currencies has a negative impact on gold and US equities. I am considering UUP, which rises when the USD gains against a basket of commodities.

I held it for two years at a loss. After I finally sold it, it went up.

Did the vehicle achieve the objective of matching the performance of the dollar against a basket of currencies. Perhaps the dollar fell over the timeframe you held the instrument.

When the European crisis hit I bet against the euro. I was wrong for two years and gave up. Usual story

Resurrecting an older thread as I would like to know whether UUP has a place in a variable portfolio. If gold is priced in USD and the dollar rallies against other currencies, we would expect a decline in the price of the commodity. How would/did equities and treasuries (short and long) fair under a strengthening currency?

Treasuries benefit from a rising dollar.  Since dividends are paid in dollars, there is increased demand from a strong reliable dividend generator like long-term treasuries. 

Equities are another story, they could go either way.