29 min

59 - How to manage Currency Risk (Loss of Purchasing Power Parity) The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

    • Investering

One potential risk of earning an acceptable return is for your investment returns to be eroded by changes in the value of foreign currency. You can limit this risk by avoiding countries with large problems that may impact the currency.

In this episode, we also discuss the limitations and costs of implementing a hedging strategy to limit exposure to currency risk. Hedging is a form of insurance that replaces currency risk with a guaranteed cost: insurance premiums.

One potential risk of earning an acceptable return is for your investment returns to be eroded by changes in the value of foreign currency. You can limit this risk by avoiding countries with large problems that may impact the currency.

In this episode, we also discuss the limitations and costs of implementing a hedging strategy to limit exposure to currency risk. Hedging is a form of insurance that replaces currency risk with a guaranteed cost: insurance premiums.

29 min

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