Forum Replies Created
- 10/05/2020 at 2:51 pm in reply to: hedging the value of the portfolio (in dollars) for European subscribers of LI #80313
You’re right, the advantages are many, but the problem is that I can only do simpler strategies (so no GLD-Usd lev or bond rotations, no low volatility indexes like SPLV and so on) and for treasuries there are no micro futures, so no possibility to adjust the allocations on my account unlike for gold and stocks.. an alternative is using CFD but you pay 1.65% per year of invested value on IB, that it’s not too bad but they are cfd, not the real things..10/04/2020 at 8:04 am in reply to: hedging the value of the portfolio (in dollars) for European subscribers of LI #80299
I was thinking that what we are interested about is the value of our account in EUR (for european investors), so when there’s a drawdown usually the market goes long usd and given that we are long usd due to our investment in usd etfs, we benefit from that and we reduce our drawdown when there’s one.
So strategies like gld-usd leveraged are very nice for americans that can increase their exposure on usd currency and reduce the drawdown, but not that nice for europeans, for example, as we already are long usd (and so short eur). Unless they are currency hedged, obviously. But currency hedging comes with a cost, so I was wondering if having strategies like GLD-USD leveraged in the portfolio AND being currency hedged is useless, as we could just be long GLD with no currency hedging, get pretty the same results but saving some money.
Eur-usd currency hedging is cheap these days, but it has been very expensive in the past, so it’s a problem that’s better to deal with.
I don’t have QT so I can’t tell anything about your strategy, but I read that you use LQD, I didn’t know it and it looks better than TLT for return/risk ratio. Probably TLT is better to hedge stocks, but LQD would be a nice addition to a portfolio, I think.