Dollar

  • 12 Mar
    Sunday Edition: My Favorite Long-Term Currency Play

    Sunday Edition: My Favorite Long-Term Currency Play

    Markets are forward looking, and therefore have a way of discounting many fundamental arguments as to why an asset should rise or fall, so that when the “fundamentals” seem obvious, it’s too late as a trader, and often even as an investor to earn outsized gains.

    To illustrate my point, I will use an article I came across that was written on October 25, 2016.  Even though the article is now a little over four months old, the basic thesis put forth in the article is still “relevant” to my discussion. More →

  • 08 Mar
    Inflation Has Arrived – Here’s What That Could Mean For Markets

    Inflation Has Arrived – Here’s What That Could Mean For Markets

    • After 7 years of enjoying interest rates close to zero, the party is over.
    • There are several scenarios that can develop, but the long-term outcome is clear.
    • In the short term, higher interest rates should increase demand for the dollar and U.S. assets, so we could see a higher S&P 500 in combination with higher interest rates.

    Introduction

    For the past year I have been writing about how things are bound to change when inflation finally arrives. Well, inflation has arrived and it’s quickly going higher which means that we’ll have to start talking in nominal and real returns, the FED will be forced to take action no matter the economic environment, and it will have significant repercussions on the economy and markets.

    Usually when I’ve written about inflation, it was about something that will happen somewhere in the future. Now that inflation is finally here, I’ll discuss what will happen in the short term. More →

  • 02 Feb
    It’s Time To Pay Attention To The Euro

    It’s Time To Pay Attention To The Euro

    • Currency movements can be easily explained through macro trends, but the timing isn’t that precise. However, long term investors can reach additional returns by following a few easy steps.
    • Cyclical currency patterns are natural, and under the influence of economic growth in the long term.
    • The dollar is approaching its peak and is ready to return to its historical mean.

    Introduction

    In last weekend’s Sunday Edition, Investiv Founder, Shane Rawlings, elaborated on how long term macro trends inflect exactly at the moment when there seems to be a general consensus that the trend will last for a long, long time.

    Nobody was buying stocks in 1981 because they thought high inflation would stay around forever. On the other hand, in the 1990s, people were convinced that the best investment was internet stocks. And in the 2000s, the conviction shifted to the real estate market as it seemed that the only way to go was up forever.

    Currently there is a strong conviction that the U.S. dollar is going to strengthen as interest rates rise and the U.S. economy grows, and while Europe continues with monetary easing. More →

  • 29 Jan
    Sunday Edition: The Mighty Dollar

    Sunday Edition: The Mighty Dollar

    Several weeks ago, I wrote about how I believe it’s possible to time financial markets with a high degree of accuracy.

    In today’s article, I want to discuss the US dollar and why I believe it is nearing a long-term top (sometime in the next 6 to 18 months), and how you can use this trend change to make a small fortune. More →

  • 23 Dec
    The Dow To Hit 20,000 Alongside A Strong Dollar, Time To Be Greedy?

    The Dow To Hit 20,000 Alongside A Strong Dollar, Time To Be Greedy?

    • Investors can expect a nominal return from stocks of 4.3% per year going forward.
    • The story looks far different for speculators. The strong dollar and higher debt costs should weigh on the economy and stocks.
    • Specific sectors and international diversification offer a better risk reward situation.

    Introduction

    The Dow Jones is flirting with 20,000 points, and it’s possible that by the time you’re reading this, it has already crossed the mark.

    In addition to the Dow reaching all-time highs, the dollar index has also reached new highs for the decade. More →

  • 22 Nov
    Things Are Finally Changing – Are You Ready To Seize The Opportunities?

    Things Are Finally Changing – Are You Ready To Seize The Opportunities?

    • Economic growth has been fueled by credit in the last 30 years with increasingly lower interest rates.
    • A reversal is inevitable and will lower consumption and investments as credit tightens.
    • A 100-basis point increase in corporate debt costs would lower S&P 500 pretax earnings by 6.3%.

    Introduction

    In her latest speech, FED Chair Janet Yellen clearly stated that she expects global economic growth to firm up, supported by accommodative monetary policies abroad, U.S. inflation to reach the targeted 2% level, and the FED to raise interest rates relatively soon.

    After seven years of low interest rates and low inflation, the impact of the above mentioned changes has to be assessed very carefully as there is no recent historical precedent. More →

  • 17 Oct
    Why A Market Crash Could Be Just Around The Corner

    Why A Market Crash Could Be Just Around The Corner

    • We’ll discuss some risks first and then discuss potential rewards.
    • Valuations are the tipping point toward a riskier perspective.
    • After reading this article you’ll be able to decide for yourself what the best strategy is for you to follow.

    Introduction

    In order to see where the market is going, let us first take a look at what the market has been doing in the last two years.

    The market has had a 7% yearly return if we look at it from October 15, 2014, however, if we wait a month, the yearly return for the last two years will fall to 1.8% per year. 1.8% a year plus a dividend yield of 2% isn’t bad in the current low yield environment, but it is bad when compared to the risks stock investors are running. More →

  • 19 Aug
    The U.S. Dollar: Should You Stick To It Or Diversify Now?

    The U.S. Dollar: Should You Stick To It Or Diversify Now?

    • The dollar has been positively correlated with stocks for the last 4 years which is unusual.
    • Potential FED interest rate increases don’t make international diversification a great idea right now.
    • Any sign of a U.S. recession should be a good time to think about international diversification with emerging markets.

    Introduction

    On big news sites like Bloomberg you often come across headlines related to the movement of the U.S. dollar. The headline below is a good example. More →