Hello my fellow ET members, What currency ETF would you recoomend most for protection versus dollar decline (& profitability). Why?
Currency ETF's are the *dumbest* etf's ever thought of. Clearly designed for dumb newbies/bag holders which is why they have no volume. Why not just trade whatever currency pair you want through a broker like IB and put the rest of your money to work in something else?
Here's the list I found of ETF's: http://etf.stock-encyclopedia.com/category/currency-etfs.html What currency pairs would you recommend instead?
I'm not recommending any currency. All I saying was that currency *etf's* are a BAD way to trade currencies. Why? Because currencies by their very nature move very little % wise over time. You need *some* leverage, certainly NOT 50-100x like the bucket shops but some leverage like 5-10x in order to come up with a meaningful trade. Unless you think the dollar will be worth 50% next year.
So a currency ETF just buys a foreign currency and piles it over in the corner or something? Why don't they at least put it in a money market equivilant of that currency?
They are useful for IRAs or 401k plans where you are restricted to funds. I believe Rydex has a weak dollar mutual fund that offers two times leverage. Basically, they are a short term debt type alternative.