Hi Jay - Royalty trusts are pretty obscure (and NOT promoted), so I think that accounts for part of the higher return.
"eyes glazed over like a donut would" ;-)
By the way, ever notice how most people aren't interested in learning about the wonderful world ?
On borrowing Yen -I can imagine a crisis that would have your Yen loan called or Yen becoming more valuble and USD and CDN less so. At the same time, interest rates on US government obligations might increase sharply, causing some migration out of Royalty trust into fixed income investments. This might actually be the first part of your decline of the dollar / rise of gold script. Note that gold doesn't make a big rise until later in the play.
If your were getting 12% in a royalty trust, but could get 9% on a government bond (instead of todays 4%) , many people would switch part of their portfolio to the bonds, selling the royalty trust.
There may be some inexpensive ways to hedge this. Or, just limit how large a position. Lots of opportunities in the world.
Bought MIR, CPN, WMB, RRI, ERF today. Sold OS, PLCM (Polycomm -speaker phones, my Sars play) |
