May 1, 2006
Plus we can see that emerging equities remain strong.
The Asian MultiCurrency Portfolio has continued to rise from the +90.10% up to 93.81% since October 21, 2005! The downfall of emerging currencies has still not impacted Asia .
The other emerging equity portfolio rebounded strongly from 47.61% to 67.40% since October 21, 2005. This portfolio has fluctuated dramatically but few investors who hold it are complaining.
The three Dollar MultiCurrency Portfolios remain in negative territory and here we see the major US dollar shift. The US dollar long portfolio was the strongest of the three dollar positions. It has dropped heavily from -0.875% to -4%.
The Dollar Hedge Portfolio dropped from -1.39% to -2.51%.
The Dollar Short Portfolio, which had been the weakest of the three dollar portfolios, became the strongest (though was still in a loss position) as it rose from -4.24% to -0.793.
There are two lessons here. First watch the US dollar. There appears to be a shift in the trend. The greenback is now weakening! This would suggest strength in the emerging currencies that pay high yields.
The second lesson is that during times of turmoil, seemingly riskier investments (equities) perform better than those (bonds) that are traditionally safer.
I am traveling from Ecuador to North Carolina this week, but do not hesitate to send me your questions after May 5, 2006. See the attached file.
Until next update, good investing to you!