Opinion: Bruno Bertez and the CHF/USD rate

[Ether]

I just finished reading this article:

Dollar, generalized negativity, reasons for the counter-stance, analysis

To add fuel to the fire, the IMF believes the dollar is still overvalued by 10% at 20%.

I am addressing those who have their portfolio mainly in dollars, what adjustments are you considering or on the contrary that you do not intend to make? Are you concerned about the situation, or are you waiting until September to see which way the wind turns?

Of course, I believe, like Buffet, in the dollar. If there were no conflicting opinions, there would be no market, but what interests me is to have your opinion on the situation. For my part, I am exposed to 50% of my assets and the USD part has been negative since the beginning of 2017.

[Jerome]

It is very difficult, if not impossible, to make predictions about the direction a currency will take in the future. All we know is that in the past the CHF has very often been a strong currency, known as a safe haven, while the dollar has rather been a weak currency, with expansive monetary policies. So the USD/CHF pair is structurally bearish.

Personally, from an equity-oriented perspective, if you choose your shares in the USA, all you need to do to protect yourself from this problem is to focus on international companies, which are heavily exposed abroad (and which even benefit from a weak dollar). It should also be noted that even by buying "Swiss" you are also exposed to exchange rate risk, since our country is naturally turned towards the outside world. Nestlé makes most of its turnover abroad, for example.

What worries me most in the US is not the dollar, but rather the extreme valuations of many stocks. I am in the process of completely changing my portfolio because of this. I will give more information on this subject soon.

More info:

Protect yourself against exchange rate risk by investing globally

Foreign currency actions and currency risk (1/4)

 

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