My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I adhere to the philosophy of trend following.
Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets me apart from other traders is that I am not only concerned about the return on investment but how much risk I will have to tolerate to achieve my goals.
If you are interested investing with Andrew Abraham via my managed accounts please come to Abrahamcta.com.
Is there a Safe Haven for Currencies?
In these uncertain times all are asking where to put their money? I am not supporting one should jump into forex currency trading. I am referring to a safe haven in which someone can park some of their net worth. In the past the safe havens have been US Dollar, Japanese Yen and Swiss Francs. The problem today is that these countries economies are struggling. The Japanese economy is a disaster. The International Monetary Fund forecast Japan’s output shrinking by 5.8% this year. The Swiss have their issues for example UBS as far as tax scenario,all the toxic assets the major banks are holding as well as untold amounts of loans in Eastern Europe based in Swiss Francs which might not get paid back.
However one country is not having all these issues.An unknown candidate is showing up as a safe haven currency.
It is the Norways Krone. There are many reasons.
Firstly Norway’s budget and current-account surpluses are the strongest and largest compared to many other countries. Norway has a sovereign wealth fund that did not make many of the bad investments that other sovereign wealth funds did. Add in the fact the natural rescources Norway owns ( CRUDE OIL). Comparing the decline in exports Norway is expected to only experience a slight decline. Compare this to countless other countries. Based on these points it seems very unlikely the Central bank of Norway will need to print money like so many other countries.
Before you jump into the Krone, You need to consider several points. It almost seems the best of the worst scenario with currencies. As well as there is the emotional influences. The US dollar has been appreciating out of fear possibly. Norway is not that huge of a market nor does it have the financial infrastructure in comparison to US,Japan or the Swiss. More so there is less liquidity and a much smaller bond market. This all goes back to the idea of diversification. Spread it out. Take a small packages of your net worth and spread it around. Don’t make big bets. The goal here is not forex currency trading but rather somewhat of a diversification with a stronger than the rest of currencies. Be aware as in any investing or more so currency trading there are risks. Have a plan why you buy and more so a plan of exit.
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