Hedging against a weakening dollar

sitting IN the bank...

I have roughly 25% of our liquid reserves in a basket of foreign currencies, EUR, CAD, GBP, NZD, AUD. This was done through my brokerage using the FOREX market for exchange rates (pay only bid/ask spread) and the foreign currencies sit in a money market account. I spoke to Chase about this but they unable to provide this service. I have had the foreign currencies for about 6 months now and may begin to rotate scale out as I am getting a little worried about a dollar rally here.

I trade the equity markets pretty aggressively with roughly 25% of our capital.

We currently have about 50% sitting in USD at Chase.

We own no NYC real-estate.

More than that and sitting in the bank. I'll continue living with the paltry interest rates, happy not to lose any money.
A lot of it will go into real estate when I find the right apt. The market(sales) is still wrong.

But a formula my dad told me a long time ago is so wise and it's kept me safe. A third a third a third.
A third in real estate, a third in your business (or stocks) a third liquid. You can hedge along 5 to 10% with market conditions but don't stray too far.

I've been worried about this very thing for years. Meant to go long earlier this year Eur/Cdn when the dollar rallied but didn't come to my preset "sell USD" point. Now, it looks like I've missed the boat. On the other hand, the stock mkt seem to be inversely correlated with the USD. If the stock market tanks again, could be another rally in the USD.

Precisely. I am fearful that a technical rally in the dollar here would crush the equity markets. Short USD is getting very crowded and carry trades never end well. Some suggest this could continue for years however.

http://www.forbes.com/feeds/reuters/2009/11/12/2009-11-12T193219Z_01_N12318790_RTRIDST_0_MARKETS-FOREX-CARRYTRADES-ANALYSIS.html

Stick to commodity currencies (CAD, AUD)

metro cards baby

a million dollars can buy a lot of chef boyardee. sit tight

Agree, +vecarry.

There are plenty of currency ETF's out there. Stick to AUD or CAD and only buy on pullback. Every now and then dollar strength shows it's head. Buy then.

marco_m, perfect. Do they come in million dollar demoninations? I need a few.

I'm short the Dow, short oil and long natural gas.

anyone care to recommend any alternative energy stocks

QTWW and BYDDF (not alt energy per se, alt car energy). Quantum owns a chunk of Fisker and Buffet owns a chunk of BYD.