All,
Multi-country functionality gave us access to many undervalued markets. Some ratios as CAPE show that especially emerging markets may offer some investing opportunities. However, as usual in the recessions, dollar is a safehaven and its value increases in comparison to other currencies. On the other hand, EM currencies in the recession are meaningfully weakened which favours holding dollar denominated assets.
As a Polish investor, I earn Polish złoty (PLN), so I’m interested in increasing value of my assets denominated in PLN. For instance, my port shows 48% of maximum drawdown in 2008-2009 period. In the same period PLN lost about 50% of its value in complarison to USD, that is why holding US denominated assets fully hedged the drawdown.
This raises the question- are you planning to hedge the currency risk?
One option is to hedge it by borrowing the currency from the broker (IB offers that), risk is hedged, but currently you have to pay quite a big interest rate. For instant, buying stock in Poland will cost you about 10% of interest rate.
Do you have any thoughts on that?