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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Allen Furlan who wrote (16490)	2/22/2003 1:45:28 PM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 79054

Allen, <<Any ideas on how to play a bet on bond yields increasing? I have thought about this problem and have not found a perfect way to deal with it. Here are some of my thought processes. If one keeps capital in short term debt instruments and keep rolling it you would be behind the curve on bond yields the time frame you are rolling the debt. If the increase in bond yields come from foreigners selling US debt the dollar should take a serious hit. If during this period you own foreign debt the value of the debt will go up if the currency you hold these bonds goes up as the US dollar declines. The cash flow or stream of revenues from these bonds would translate positively for the US owner as it is converted into US dollars as they are paid or one could keep a foreign currency account to hold this cash flow or any other capital. Gold and Platinum seem to have been the metal currency of choice during the recent decline in the US dollar. One could buy the metals or stocks in companies that mine the metals. Most metals have increased in US dollars terms and one could own a fund that tracks the CRB index. QRACX is one fund, but the fees are high. Pimco has one for administrative accounts, but I have heard they will let you in if you send the money to them directly. You can look at the charts of FCO, FAX, GIM, BEGBX and PSAFX to get an idea of the increase in value of owning foreign debt during the recent US dollar decline against other currencies.