Gyroscopic Investing

Fredmong wrote: ↑Sat Dec 12, 2020 2:28 pm Hi fellow Canadian,

To hedge or not to hedge ? I thought about this quite a bit. Looked for hours at performance charts (USDCAD vs SPY vs GLD). Wisdom says whatever you choose, keep doing it. What I mean is if you do choose to hedge, keep hedging forever because otherwise you will end up inadvertently timing the market. For the sake of simplicity I decided not to hedge and attacked the problem differently.

First off, I think Canadian investors (and any international investors) must invest in the US. It's the biggest economy in the world and it controls the world reserve currency. Like you said long stock is essentially short dollar and on different time frames when the stocks crash, usually the dollar gains strength. Which is kind of a double edged sword for us Canadians investing unhedged in US stocks. Long story short, in the end, over a long enough period, it kind of all evens out as long as USDCAD is in a tight range. That led me to the conclusion that I wouldn't hedge and that I would just diversify and ultimately rebalance if need be.

I have 2 Permanent Portfolio, one US (SPY,GLD,TLT,SHY) and one CAD (VCN,MNT,ZFL,CLF). Right now I'm about 80% US-PP and 20% CAD-PP. I am not rigid on the allocation but would probably not let them the CAD-PP get over 30%. And since gold is gold, in my view only 75% is currency exposed, I am really 60% in US denominated assets, 15% in CAD denominated assets and 25% in gold.

doodle wrote: ↑Sun Dec 20, 2020 10:20 pm As a US citizen I'm thinking of potentially hedging into other currencies. I am having serious doubts about the viability of my country right now and with that it's currency. Unfortunately up until now haven't explored my options. Perhaps a basket of three currencies, rebalancing according to some metric....loonies, euros, dollars or something