Email of the day (3)
Comment of the Day

July 13 2011

Commentary by David Fuller

Email of the day (3)

On hedging options:
"I am a private investor living in a eurozone country wishing to invest in a non-fixed term USD-denominated instrument which I expect to hold for at least a couple of years. Given the volatility of the EURUSD exchange rate in recent years I wish to hedge the currency exchange risk so that any potential profits from the investment don't evaporate due to a weakening dollar. Can you or the collective recommend some good hedging options. I know this is basic stuff to experienced investors but hopefully it will be of benefit to other novices like myself.

"Thanks for the service, it's accelerated my understanding of the markets considerably since I began my subscription."

David Fuller's view Thanks for the feedback. I would like to help but unfortunately I do not understand the question. I am not sure what sort of instrument you are looking for, and why USD-denominated if you are concerned about that currency?

If you wish to hedge against USD or EUR weakness, why not an instrument denominated in a stronger currency? For instance, you can opt for growth and or yield in Asian, Australian or Canadian equities.

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