I recently had a discussion about this with KI. But I would still like to hear opinions from people who are familiar with it.
My assessment: it doesn't matter in the long term. But later, when I need the money in the short term, I will almost certainly no longer shift it for tax reasons and will then be dependent on the current market situation. A weak dollar can of course also boost the profits of US companies and then lead to price rises again.
As I regularly switch the ETFs I hold to the same or a similar index anyway, I might take a hedged one next time. Then I have the choice during the withdrawal phase, depending on the market situation
My assessment: it doesn't matter in the long term. But later, when I need the money in the short term, I will almost certainly no longer shift it for tax reasons and will then be dependent on the current market situation. A weak dollar can of course also boost the profits of US companies and then lead to price rises again.
As I regularly switch the ETFs I hold to the same or a similar index anyway, I might take a hedged one next time. Then I have the choice during the withdrawal phase, depending on the market situation
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2Lun
@DonkeyInvestor 50:50 hedged-unhedged is probably the smartest allocation in the long term.
Ah, our clever donkey... 🥸
Ah, our clever donkey... 🥸
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•@Epi But 50-50 seems a bit too much of a good thing to me. Why don't you do another backtest?
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@DonkeyInvestor my thought similar
Long investment horizon-> nothing to reallocate
For the short term, simply rebuild a hedged position
Long investment horizon-> nothing to reallocate
For the short term, simply rebuild a hedged position
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@GoDividend but for the short term you don't invest in world or sp in the first place
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2Lun
@DonkeyInvestor
Would you say NOT hedging is a currency bet FOR the US dollar?
Wouldn't it be rational to be invested in the home currency?
Would you say NOT hedging is a currency bet FOR the US dollar?
Wouldn't it be rational to be invested in the home currency?
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@Tacticus For me, not hedging means trusting that the USD will not depreciate excessively against the euro in the long term.
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@Epi if you don't believe in the total and long-term collapse of the USD, it probably only makes sense to switch the savings rate to unhedged 10-15 years before the planned withdrawal phase. Unless, of course, you are called Epi and are keen to reduce fluctuations 😁
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2Lun
@DonkeyInvestor I understood you to mean that you want to hedge against possible distortions in the payout phase. In other words, if you have 50:50 hedged-unhedged, then you can unhedge exactly the one ETF that is currently benefiting from the USD cycle.
A changeover shortly before the de-hedging phase could be expensive in tax terms. So why not make yourself independent of currency fluctuations and stay relaxed?
Relaxed donkeys are more relaxed than tense ones. 🧐
A changeover shortly before the de-hedging phase could be expensive in tax terms. So why not make yourself independent of currency fluctuations and stay relaxed?
Relaxed donkeys are more relaxed than tense ones. 🧐
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@Epi because, of course, you leave a lot of returns behind and the unhedged should generally deliver the desired result. The hedged would only be for extreme market phases and can therefore be weighted lower
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•2Lun
@DonkeyInvestor
The assumption is why one should not be invested in the home currency (euro).
Because apparently, statistically you end up with +/- 0 anyway.
Why should I accept the currency risk without any expected additional benefit?
The assumption is why one should not be invested in the home currency (euro).
Because apparently, statistically you end up with +/- 0 anyway.
Why should I accept the currency risk without any expected additional benefit?
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