Once again we’re back at the time of year when analysts get out their crystal balls and try to see into the future of the financial markets. A huge amount of effort is put in, only to discover a year later that most predictions were wrong (and those that were right were surely a fluke). My regular readers are well aware of my opinion that it is not possible to predict exchange rates, i.e. what year-end rates may be. What is possible, but not much easier, is to identify potential tendencies from the information available, or at least spot the primary trend. This is important for long-term investors in particular, because currency positions in a portfolio can have a huge impact on performance. For Swiss investors, the constant strength of the Swiss franc is a very good example of this. The pri-mary trend is obvious. Holding foreign stocks can be very attractive depending on how exchange rates move, and attractive oppor-tunities to get on board keep on coming around.
Read our publication on this topic.
