I live in brazil and the BRL keep soaring day after day and I could not hedge because oanda doesn't have that pair, my losses were getting pretty annoying. I was forced to use proxies like CAD, EUR, JPY, gold and silver. lately I just kept most in cad and jpy. the BRL has crashed 50%(it will go lower when the market opens today) while my basked is slightly up because of the yen. My purchasing power increased by around 40% and I wasn't even aware of it, I just realized this today :eek:
40% ... then you were mostly into USD. I too do not hold BRL, except for property investments - but those are very profitable - the best one being a house bought just when Lula won the election. Also, remember that unless you realize your "profit", you are not really having any gains. If you don't need or use the BRL increased buying power you got - then it's not really there... Also - it means that you shifted from BRL to USD etc when the USD was at it's lowest - otherwise you are just touting the swings - and not any investments or personal currency base shifts.
I never shifted from BRL to USD, my income is in USD, some of my expenses as well. I understand that I need to hedge back to realize my gain, this is difficult since there is no futures. there is the ETF BZF but you need to put 100% down so it doesnt work. I will probably have to risk going into a big hedge in gold and silver down the road, its risky but doing nothing is risky as well.
omg BRL is down 6% right now. after a -5% move yesterday. I'm just praying the world ends so I can buy an entire city with my savings account
In the short term - a weak BRL is very, very welcome - both for foreigners living in Brazil, but also for foreign investors. I am not looking at cashing in on my Brazilian investments any time soon - so this is just good news. The BRL will be stellar in no less than 12 months.
I agree with that. when commodities come back EWZ and the Real should be buys of a lifetime, problem is to hedge USD exposure. how do you personally handle this issue?
I shift base currency from time to time, but am pretty confident in Euro strength in the years ahead as well as short term right now. I have almost no USD exposure.