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  • From: ron thigpen <ron AT fuzzsonic.com>
  • To: "Internetworkers: http://www.ibiblio.org/internetworkers/" <internetworkers AT lists.ibiblio.org>
  • Subject: Re: [internetworkers] Social Security reform? (was: UK contracting)
  • Date: Wed, 09 Feb 2005 10:30:06 -0500

Greg Cox wrote:

Speaking of which, what's a good way to put some small savings (a few
hundred to few thousand bucks) into Euros as a hedge? I'm not world-
traveler enough to know who socks you with heinous fees.

What you're really talking about is reducing (balancing) your personal exposure to exchange rate risks against the dollar by purposely exposing yourself to the exchange rate risk of another currency.

In simple terms, you're betting the dollar will drop over time sufficiently that the risks of overseas investments will be more than compensated by gains resulting from the exchange rate fluctuation.

You would want to put that other currency to work, so look for investments priced in other currency rather than the ducats themselves. You'll want to pick good investments and you'll want to diversify. But, you don't have the time, expertise or other resources to manage a mixed portfolio of overseas.

So, look for mutual fund that invests in instruments traded in foreign currencies. More specifically, look for a well performing one that does little to no exchange rate hedging.

I am in no way recommending that you make this play. Just spinning out some thoughts on how it could be done.

--rt




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