Perhaps I was being too harsh to say HDB worked in spite of myself. It’s worked as I thought it would. I’m rethinking the volatility I get with it when what I set out for was a simple (for me) to execute dollar hedge.

Best.

Allan, about foreign stocks: Foreign stocks give a degree of currency diversification when their revenues and costs are inside their own country. The profits that they make in their currency are unaffected by currency movements, but to us, foreign investors, if their currency appreciates, the value of their profits is greater to us.

A company that receives most of their revenues in dollars, but costs in local currency terms acts more like a domestic US stock. As the dollar depreciates, so do their revenues and profits. In US dollar terms each situation will be different, but it would be difficult to say categorically whether the US investor would be better or worse off from the depreciation.

Very interesting blog of late! Are you free to explain how you’ve put your fixed income into foreign currencies? As a follow-up, in case you can’t be overly specific as to your own situation or your’s doesn’t scale down well, how would a mid 5 figure individual investor do the same?

It could well be I’ve missed something obvious, but I’ve not had much luck tracking down country-specific bond funds. Sorry if this should be a “go ask your broker” question. FWIW, I’m inclined toward Chile, maybe India, and maybe Russia.

At the risk of giving away my level of ignorance in this regard, I’ll admit I bought stock of HDB a year and half ago thinking dividend-paying banks are a good way to accomplish foreign currency exposure. It’s worked for me, but I’m getting the feeling it was inspite of myself.

Best,
-Allan