that's one of the reasons those of us who bought great divvy stocks in 09 have seen them whip the S&P 500 in sheer cap gains, never mind the delicious tingle you get from getting 8-15% in safe, growing divvys, (even better when their coming in CAD, AUD, NOK, SEK, or other currencies that are managed by responsible adults who don't steal from savers via currency debasement
As I'm sure many of you are aware, you can dodge that bullet with MLPs, (Master Limited Partnerships) which, as the name implies, are partnerships which are pass-thrus and income only taxed once.
NB: while they trade like stocks, as partnerships they come with more complex accounting and specific tax rules. Not good for short term trading or for certain kinds of accounts like IRAs. Long story, point is, do your homework on them first
Good points, not enough time to give them the full answers they deserve, but will leave you with this:
while we certainly can't predict future, if we just look at 10-20 year currency trends (look at chart of EURUSD, USDCAD, USDJPY, USDCHF, AUDUSD and other major pairs for the USD (assuming USD is your primary currency) you can see some clear long term trends.
While short term trading is definitely not for everyone (a losers game for most who don't put in the time needed to learn it), currency markets produce some of the most reliable long term trends you can find. That's because it's much harder to change the fundamentals of an entire nation or region (in the case of the EU) than it is for an individual company. So trading those long term trends, once you find them, is relatively simple and safe.
A few key warnings: don't do it with high leverage accounts that are common in retail forex (there are those that allow very low or no leverage) and you MUST learn some basic risk management techniques. Not hard, but essential. I discuss these at length and relentlessly in my book (see my profile for details on it and links for further details.
Even better, some pairs actually pay you regular interest like an income stock. Discuss that to in the book, btw. Takes a bit of study and practice, but no biggie, and risk very controllable
What Everyone Must Know About The U.S. Dollar: Sea Change Coming? [View article]
bw,
If you're referring to the conclusion, more trying to remind readers of the importance diversifying your exposure by currency, just as you would by asset and sector type. (too few aware of this).
Even those who are aware usually have some trouble with finding the right ways to do it that are simple and safe enough for their needs. Wrote book that's a whole collection on ways to do that, either as a conservative trader or passive income investor who would never trade currencies. See my profile for details on the book and links to further info, reviews, etc on my website or the book's amazon page. Cheap insurance against risk of weakening USD, EUR, GBP and JPY (or other currencies subject to debasement) and the loss of purchasing power/.wealth that comes with that
What Everyone Must Know About The U.S. Dollar: Sea Change Coming? [View article]
Nesti,
sorry for lack of clarity. Basic points:
USD usually moves in opposite direction of risk assets like stocks, has been moving with them in recent months
offered a bit of explanation as to why
reminded readers that the USD rising along with stocks after a great US jobs report (at least per headlines) DOES NOT signify any change in its normal status as a safe haven currency (that normally moves in the opposite direction of stocks) and explained why.
If you're interested in a more complete understanding of concepts given above, consider my book, details and link to more info on my profile page here on SA
17.5% Dividend Payer Apollo Global Management Is Executing Exceptionally [View article]
as always, a worthy read, but man, with a divvy that high, really need to look closely at where the risks are and if market has oversold on this one.
so good to see SOMEONE really warn on market risk, as this snarky little detail seems to get ignored, yet most stocks, no matter how good, move with overall market.
Question:
As a big advocate of currency diversified income (see my profile and book on how income investors can get currency diversified income in safer currencies than the USD), does anyone out there know of some good REITs or equivalent kind of thing in Australia, Norway, Sweden, Singapore, Israel, or from other countries that are not actively or preparing to gut the value of their currency?
Leonard Melman: Are You Prepared For Hyperinflation? [View article]
yes, assuming you can find some that have been responsibly managed. Fortunately there are, and some of these come from commodity producing nations and so offer an added hard asset support. The advantage of that approach is that you can then invest in the income producing assets of that nation and build a currency diversified income stream.
The problem for most investors is that while they recognize the huge risks to the future value of the USD, EUR, JPY and others) it's been hard to find cost effective guidance on how to identify the best currencies for long term investing and how to build an income portfolio that's diversified by currency as well as sector and asset class.
See my profile page for one good guide to exactly this topic, (only one I know of, actually, that covers both conservative forex trading and currency diversified income investing, or just search, The Sensible Guide to Forex.
Draghi: Risks remain to the downside, he says, announcing cuts to the ECB's EU GDP growth (or contraction) forecasts for 2013 and 2014. The euro (FXE) shoots higher, now +0.7% at $1.3058. Go figure. [View news story]
Yes, news suggest new stimulus more likely, which should suggest a lower EUR. Unless this reflects belief that EU situation already so bad anything that ups its chances of survival, which are still very much in question despite official comments otherwise, is somehow ultimately good news because at least EUR survives. Have seen this line of thinking before.
IMHO we are back where we were in 2000 and 2007 but at least then the fundamentals looked good, at least on the surface. Today, the US is barely growing, Europe is contracting hard and may well yet threaten solvency issues that could go systemic.
As I wrote in my 2013 forecast on SA, it all gets down to whether you believe stimulus can keep risk assets pumped up. Heck, even Roubini thinks it could for another 2-3 years (after which, not so good...)
Too much market risk right now. 10-15% 'normal' correction overwhelms the 5-6% at best most divvy stocks pay.
Longer term, those based in currencies being debased by their central banks (USD, EUR, JPY, et. al) will also see their portfolios lose real value (no, just because you only spend in your local currency doesn't help - think how many of the goods and services you use either use imported imputs or are tied to global pricing)
I just wrote a collection of simpler, safer ways to diversify out of these than generally found in guides to foreign investing (which miss the currency risk aspect) or currency trading (most methods unsuited for risk averse investors). For more info, see my profile page for details on The Sensible Guide to Forex or search it on amazon for a full description and collection of reader reviews.
We don't have to accept Ben's watered down dollars, or horse meat in our Euros
Pengrowth Energy Reaffirms Its Commitment To Lindbergh Project And Its 10.5% Dividend Yield [View article]
Albert,
First, a big thanks from all of us Canadian stock fans for your recent work on this, AT (easy, bro, these things happen) etc.
I've been a long time holder a variety of these, bought mostly in late 08 and early 09, and was one of the early writers on these on SA back in early-mid 09 before other projects took me elsewhere.
I had held PGH in the past and sold out to protect whatever profit I had remaining when it began sliding. Will need to do more research on this one before deciding if time to re-enter, especially given current market risk of stocks being at decade highs without any of the usual supporting fundamentals
With Atlantic Power's outright obfuscation of the facts so fresh in our minds, I'd like to ask you and other SA readers a critical question: what are your impression of PGH management's well, "candor level". After AT, the big question in my mind, and I'm sure in others' too, is how much we can trust them to keep shareholders up to date, particularly on bad news. Can they be trusted share the relevant figures so that one can gauge dividend safety and future direction (or at least not hide it outright, as appears to be the case with AT)
Suspect many will be reluctant to jump into PGH after getting burned with AT.
Still, the point remains that CAD paying divvy stocks, chosen properly, should be a key part of investor portfolios. The CAD remains one of the relatively few truly healthy currencies out of the 8 major, most liquid currencies. Banking system is healthy and more conservative lending practices have kept it so despite Canada's pricey real estate market.
Income investors based in USD, EUR, JPY, and GBP (among others) need to diversify into currencies more likely to hold value and appreciate vs. the other majors, and the CAD is one of them.
It's up ~30% vs USD in past decade and likely to continue over long term, because relative fundamentals of countries change slowly (compared to stocks) so long established trends like this tend to persist. Nothing in current economic reports or certainly central bank policy of the two nations suggests the continued appreciation of the CAD vs. USD to stop any time soon (tho if the EU crisis kicks up again USD would strengthen based on EUR weakness only).
btw, USD's decline vs. other majors is an old story, see:
The various QEs will eventually accelerate that trend.
Don't think for a minute that just because we spend in USD or some other local currency we're insulated from currency devaluation. Long story short, too much of the goods and services we purchase either have imported inputs or use inputs affected by global prices.
Fortunately, diversifying our portfolios by currency as well as sector is no longer hard, even if you never touch actual currency trading
Here's one good collection of a range of low risk, simple ways to do that either as passive income investor or risk-averse trader
it also just won Best Forex Book Award for 2013, largely because it shows conservative traders or passive income investors how to protect themselves in safer, simpler ways than typically found in guides on currency or foreign investing.
cheap insurance in an era when even the most widely held currencies are becoming less and less safe as stores of long term value through intentional debasement by US, EU, Japan, and others
Start Investing Now For Retirement Wealth [View article]
Godd article and interesting comment stream here. A few important points appear to have been omitted, so consider the following:
1. Looking at your low yield high growth portfolio even after 5 years those dividends are pretty low even in nominal terms. In real terms lower, so I question whether those kinds of yields are so low they’re self defeating and not keeping up with inflation. Capital gains or losses will depend on overall market, as these should move along with S&P 500, roughly.
2. Because you’re addressing long term investors, a couple points worth noting:
a. Don’t forget market risk. Even if you take a very long term approach, this is a particularly dangerous time to be establishing new longs at current prices. At least look at a chart for your planned purchases and try to buy them with limit orders at support levels at least 10% lower.
(and in other recent posts) US indexes are near decade highs seen only in 200 and 2007, yet supporting fundamentals are much worse, making this very bearish “triple top” formation even less credible.
2. All of the above pay you in US dollars. Those who have been paying attention to Fed policy know that Ben is taking significant risks with the USD’s ability to serve as a long term store of value. Long term income investors need to not only have at least a portion of that income stream in non-USD form, preferably in the currencies that have been in long term uptrends vs. the USD. You not only hedge that USD devaluation risk, you also benefit from relative appreciation of the other currency vs. the USD
This story isn’t new, in fact the USD has been quietly depreciating versus most of the major currencies for decades. For example:
-- down ~75% vs. the CHF since 1970 --down ~50% vs. the JPY since 1990 --down ~ 30% vs. the CAD 2002
It’s even worse when you compare the USD to certain basic commodities.
You’d find a similar story comparing the USD to the EUR (using the old Deutchemark as a substitute)
Just because you spend in USD doesn’t mean you’re insulated at all from these currency fluctuations (think how much of what you buy has imported inputs of some kind).
The past years’ assorted QE programs continue in this direction and risk accelerating it
Bottom line, anyone with most of their assets in USD (or EUR, JPY, GBP or other currency at risk of deep debasement) needs diversify into assets denominated in or linked to healthier currencies that will better hold their value. Here's one good collection of a range of low risk, simple ways to do that either as investor or trader
it also just won Best Forex Book Award for 2013, largely because it shows conservative traders or passive income investors how to protect themselves in safer, simpler ways than typically found in guides on currency or foreign investing.
19 Things I Like About Dividends [View article]
19 Things I Like About Dividends [View article]
As I'm sure many of you are aware, you can dodge that bullet with MLPs, (Master Limited Partnerships) which, as the name implies, are partnerships which are pass-thrus and income only taxed once.
NB: while they trade like stocks, as partnerships they come with more complex accounting and specific tax rules. Not good for short term trading or for certain kinds of accounts like IRAs. Long story, point is, do your homework on them first
19 Things I Like About Dividends [View article]
Good points, not enough time to give them the full answers they deserve, but will leave you with this:
while we certainly can't predict future, if we just look at 10-20 year currency trends (look at chart of EURUSD, USDCAD, USDJPY, USDCHF, AUDUSD and other major pairs for the USD (assuming USD is your primary currency) you can see some clear long term trends.
While short term trading is definitely not for everyone (a losers game for most who don't put in the time needed to learn it), currency markets produce some of the most reliable long term trends you can find. That's because it's much harder to change the fundamentals of an entire nation or region (in the case of the EU) than it is for an individual company. So trading those long term trends, once you find them, is relatively simple and safe.
A few key warnings: don't do it with high leverage accounts that are common in retail forex (there are those that allow very low or no leverage) and you MUST learn some basic risk management techniques. Not hard, but essential. I discuss these at length and relentlessly in my book (see my profile for details on it and links for further details.
Even better, some pairs actually pay you regular interest like an income stock. Discuss that to in the book, btw. Takes a bit of study and practice, but no biggie, and risk very controllable
Coming Week Market Movers: The 10 Things You Absolutely Must Watch [View article]
What Everyone Must Know About The U.S. Dollar: Sea Change Coming? [View article]
If you're referring to the conclusion, more trying to remind readers of the importance diversifying your exposure by currency, just as you would by asset and sector type. (too few aware of this).
Even those who are aware usually have some trouble with finding the right ways to do it that are simple and safe enough for their needs. Wrote book that's a whole collection on ways to do that, either as a conservative trader or passive income investor who would never trade currencies. See my profile for details on the book and links to further info, reviews, etc on my website or the book's amazon page. Cheap insurance against risk of weakening USD, EUR, GBP and JPY (or other currencies subject to debasement) and the loss of purchasing power/.wealth that comes with that
What Everyone Must Know About The U.S. Dollar: Sea Change Coming? [View article]
sorry for lack of clarity. Basic points:
USD usually moves in opposite direction of risk assets like stocks, has been moving with them in recent months
offered a bit of explanation as to why
reminded readers that the USD rising along with stocks after a great US jobs report (at least per headlines) DOES NOT signify any change in its normal status as a safe haven currency (that normally moves in the opposite direction of stocks) and explained why.
If you're interested in a more complete understanding of concepts given above, consider my book, details and link to more info on my profile page here on SA
17.5% Dividend Payer Apollo Global Management Is Executing Exceptionally [View article]
so good to see SOMEONE really warn on market risk, as this snarky little detail seems to get ignored, yet most stocks, no matter how good, move with overall market.
Question:
As a big advocate of currency diversified income (see my profile and book on how income investors can get currency diversified income in safer currencies than the USD), does anyone out there know of some good REITs or equivalent kind of thing in Australia, Norway, Sweden, Singapore, Israel, or from other countries that are not actively or preparing to gut the value of their currency?
thx
A Critical Yet Bullish Look At Brandywine Realty [View article]
Leonard Melman: Are You Prepared For Hyperinflation? [View article]
The problem for most investors is that while they recognize the huge risks to the future value of the USD, EUR, JPY and others) it's been hard to find cost effective guidance on how to identify the best currencies for long term investing and how to build an income portfolio that's diversified by currency as well as sector and asset class.
See my profile page for one good guide to exactly this topic, (only one I know of, actually, that covers both conservative forex trading and currency diversified income investing, or just search, The Sensible Guide to Forex.
Full disclosure, I'm the author.
Draghi: Risks remain to the downside, he says, announcing cuts to the ECB's EU GDP growth (or contraction) forecasts for 2013 and 2014. The euro (FXE) shoots higher, now +0.7% at $1.3058. Go figure. [View news story]
Dow Today Versus Its 2007 Peak [View article]
IMHO we are back where we were in 2000 and 2007 but at least then the fundamentals looked good, at least on the surface. Today, the US is barely growing, Europe is contracting hard and may well yet threaten solvency issues that could go systemic.
As I wrote in my 2013 forecast on SA, it all gets down to whether you believe stimulus can keep risk assets pumped up. Heck, even Roubini thinks it could for another 2-3 years (after which, not so good...)
Too much market risk right now. 10-15% 'normal' correction overwhelms the 5-6% at best most divvy stocks pay.
For more detail see here: http://bit.ly/15lbW17
Longer term, those based in currencies being debased by their central banks (USD, EUR, JPY, et. al) will also see their portfolios lose real value (no, just because you only spend in your local currency doesn't help - think how many of the goods and services you use either use imported imputs or are tied to global pricing)
I just wrote a collection of simpler, safer ways to diversify out of these than generally found in guides to foreign investing (which miss the currency risk aspect) or currency trading (most methods unsuited for risk averse investors). For more info, see my profile page for details on The Sensible Guide to Forex or search it on amazon for a full description and collection of reader reviews.
We don't have to accept Ben's watered down dollars, or horse meat in our Euros
Pengrowth Energy Reaffirms Its Commitment To Lindbergh Project And Its 10.5% Dividend Yield [View article]
First, a big thanks from all of us Canadian stock fans for your recent work on this, AT (easy, bro, these things happen) etc.
I've been a long time holder a variety of these, bought mostly in late 08 and early 09, and was one of the early writers on these on SA back in early-mid 09 before other projects took me elsewhere.
I had held PGH in the past and sold out to protect whatever profit I had remaining when it began sliding. Will need to do more research on this one before deciding if time to re-enter, especially given current market risk of stocks being at decade highs without any of the usual supporting fundamentals
see: http://seekingalpha.co...
With Atlantic Power's outright obfuscation of the facts so fresh in our minds, I'd like to ask you and other SA readers a critical question: what are your impression of PGH management's well, "candor level". After AT, the big question in my mind, and I'm sure in others' too, is how much we can trust them to keep shareholders up to date, particularly on bad news. Can they be trusted share the relevant figures so that one can gauge dividend safety and future direction (or at least not hide it outright, as appears to be the case with AT)
Suspect many will be reluctant to jump into PGH after getting burned with AT.
Still, the point remains that CAD paying divvy stocks, chosen properly, should be a key part of investor portfolios. The CAD remains one of the relatively few truly healthy currencies out of the 8 major, most liquid currencies. Banking system is healthy and more conservative lending practices have kept it so despite Canada's pricey real estate market.
Income investors based in USD, EUR, JPY, and GBP (among others) need to diversify into currencies more likely to hold value and appreciate vs. the other majors, and the CAD is one of them.
It's up ~30% vs USD in past decade and likely to continue over long term, because relative fundamentals of countries change slowly (compared to stocks) so long established trends like this tend to persist. Nothing in current economic reports or certainly central bank policy of the two nations suggests the continued appreciation of the CAD vs. USD to stop any time soon (tho if the EU crisis kicks up again USD would strengthen based on EUR weakness only).
btw, USD's decline vs. other majors is an old story, see:
http://bit.ly/V4R7zU
The various QEs will eventually accelerate that trend.
Don't think for a minute that just because we spend in USD or some other local currency we're insulated from currency devaluation. Long story short, too much of the goods and services we purchase either have imported inputs or use inputs affected by global prices.
Fortunately, diversifying our portfolios by currency as well as sector is no longer hard, even if you never touch actual currency trading
Here's one good collection of a range of low risk, simple ways to do that either as passive income investor or risk-averse trader
http://amzn.to/x7YOp1
it also just won Best Forex Book Award for 2013, largely because it shows conservative traders or passive income investors how to protect themselves in safer, simpler ways than typically found in guides on currency or foreign investing.
http://bit.ly/15SymIh
cheap insurance in an era when even the most widely held currencies are becoming less and less safe as stores of long term value through intentional debasement by US, EU, Japan, and others
Atlantic Power: A Tale Of Misinformation [View article]
Atlantic Power: A Tale Of Misinformation [View article]
If management lacks integrity, great sign to avoid the stock
Start Investing Now For Retirement Wealth [View article]
1. Looking at your low yield high growth portfolio even after 5 years those dividends are pretty low even in nominal terms. In real terms lower, so I question whether those kinds of yields are so low they’re self defeating and not keeping up with inflation. Capital gains or losses will depend on overall market, as these should move along with S&P 500, roughly.
2. Because you’re addressing long term investors, a couple points worth noting:
a. Don’t forget market risk. Even if you take a very long term approach, this is a particularly dangerous time to be establishing new longs at current prices. At least look at a chart for your planned purchases and try to buy them with limit orders at support levels at least 10% lower.
As I wrote in greater depth here
http://bit.ly/15lbW17
and here
http://seekingalpha.co...
(and in other recent posts) US indexes are near decade highs seen only in 200 and 2007, yet supporting fundamentals are much worse, making this very bearish “triple top” formation even less credible.
2. All of the above pay you in US dollars. Those who have been paying attention to Fed policy know that Ben is taking significant risks with the USD’s ability to serve as a long term store of value. Long term income investors need to not only have at least a portion of that income stream in non-USD form, preferably in the currencies that have been in long term uptrends vs. the USD. You not only hedge that USD devaluation risk, you also benefit from relative appreciation of the other currency vs. the USD
This story isn’t new, in fact the USD has been quietly depreciating versus most of the major currencies for decades. For example:
-- down ~75% vs. the CHF since 1970
--down ~50% vs. the JPY since 1990
--down ~ 30% vs. the CAD 2002
It’s even worse when you compare the USD to certain basic commodities.
See here for more of the gory details:
http://bit.ly/V4R7zU
You’d find a similar story comparing the USD to the EUR (using the old Deutchemark as a substitute)
Just because you spend in USD doesn’t mean you’re insulated at all from these currency fluctuations (think how much of what you buy has imported inputs of some kind).
The past years’ assorted QE programs continue in this direction and risk accelerating it
Bottom line, anyone with most of their assets in USD (or EUR, JPY, GBP or other currency at risk of deep debasement) needs diversify into assets denominated in or linked to healthier currencies that will better hold their value. Here's one good collection of a range of low risk, simple ways to do that either as investor or trader
http://amzn.to/x7YOp1
it also just won Best Forex Book Award for 2013, largely because it shows conservative traders or passive income investors how to protect themselves in safer, simpler ways than typically found in guides on currency or foreign investing.
http://bit.ly/15SymIh
cheap insurance, even if you never touch currency trading