Many people asked me the same question when RM broke the historical 3.80 a few months ago

Folks,

There is an additional advantage of diversification with asset allocation and re-balancing. You always "Buy Low and Sell High".

So, let's say you put 50% into US stock index ETF and 50% into non-US World stock index.

If US stock goes down and non-US stock world index goes up,

You sell world index (high) and buy US stock index (Low).

Ditto, if US stock goes up and non-US stock world index goes down.

You sell US stock (high) and buy world index (low).

You can do this with multiple asset classes across multiple countries with FIXED percentage.

Dreamer

chengcheng,

Are you over-exposed to MYR?? Do you have any savings / investment outside of MYR?? If not, it is never too late to diversify and protect yourself.

Spread your money out and do it a bit at a time to avoid hitting the low.

Dreamer

what if both index down? would you dump more money into each to apply the buy low sell high theory? sometimes it is just too hard to predict market movement.

Do you change the percentage according to current market situation or is it fixed forever?

Folks,

1) It is fixed forever.

<< what if both index down? would you dump more money into each to apply the buy low sell high theory? sometimes it is just too hard to predict market movement.>>

2) No, you do not dump more money in.

3) You do not sell unless the ratio between them changes.

4) You do not need to predict market movement.

https://forum.lowyat.net/index.php?showtopic=2843370

5) If you are interested, check above thread.

Dreamer

This post has been edited by dreamer101: Oct 15 2015, 09:29 AM

Some have said that gold no good. It protected my ringgit value.

Gold started the year around MYR4200 p oz.....now its approx 5,000. Approx 19% gain

USD started the year MYR3.5. Now its 4.2........approx 20% gain.........very similar.

However, its important to Diversify in uncharted times.

Cometh Deflation?

This post has been edited by prophetjul: Oct 15 2015, 09:28 AM

For time being, when RM falls, everything in foreign currencies denominated asset are protecting you the RM depreciation, be it
1. Gold is also a foreign currency denominated asset, or specifically USD denominated.
That's why we see identical gain with RM vs USD, while gold itself in USD has been stagnant.
So gold has a function of hedging RM vs USD.

2. Foreign country property
3. Foreign market shares, unit trust
5. Foreign bonds

As long as those foreign currency are appreciating against RM, specifically or majority are in USD term, then they all have a function of hedging against RM vs USD.

Most countries registered zero inflation except for countries that its currencies plummeting one.

Yes, diversification is the one can mitigate the risk, this is why it is always advisable to have a diversification portfolio.

Did you know that in normal circumstances when USDX gains, gold falls? Gold held its price.

This time round it was different...........UNCHARTED waters.

Yes, but this co-relation has broken a bit already since gold stagnant at 1100~1200 level.

Gold stagnant or range bound in this range, while USD up and down on its own.
I guess gold price has hit the bottom, just like it did during 80's to 2000 time.

It is RM fall the worst, while from Sgd, gold price doesn't appreciate as much as from RM pov.

RM is winning the currency war, sadly to say.

Yes, no single trend last forever, now we are entering a new phase or financial order.

1.00 USD = 4.14194 MYR

1.00 SGD = 3.00650 MYR

1.00 GBP = 6.40969 MYR

interesting and unusual day today for fx.

asian, european bourses and emerging market currencies rallied today, throwing out fed rate hike possibility!

but... us crude inventories swelled, price just went below 46.

weak usd yet crude price falling.

something to watch in the next few days...

Locked in some USD today at 4.16

It looks like RM recovery is together with the rest of the currencies. Many (or all?) are trading against the USD.

I bot some @ 4.1135 today

Haha.. Me too bro @ 4.11

the tide is near

for FOREX trade or saving?

Where you guys get at 4.11? Bought cash or savings account?

Dont' forget Oil price.

Oil price probably seen the worse/bottom. So most likely, it will go up.

And so will RM.