How Investors Are Playing A Weak Dollar
With the dollar trading near record lows, there has been a surge in currency trading among ordinary investors, one of the riskiest investment moves an individual can make. But there are a range of safer ways for individuals to play the weak dollar.
The preoccupation with the dollar represents a big shift for Americans, who have to think not only about how their investments perform but increasingly what currency they are in. Some top investment strategists say individuals now should have some cash in nondollar currencies as a way to profit from and protect their portfolios against a falling dollar.
Invading what was once the province of professional traders, small investors are trading Australian dollars overnight, then swapping euros in London in the morning through a variety of new Web sites that give investors 24-hour access to the currency market. But because many Americans don't routinely think in terms of euros and yen, they don't realize there are far safer ways to play the weak dollar: overseas bank accounts, currency-centric mutual funds and foreign bonds that can be bought right here at home.
LOSING CURRENCY
See a rundown of who wins and loses with a weak dollar.
For months, the dollar has been tumbling against major world currencies, though in recent days it has regained a small bit of ground against the euro. Still, compared to the euro, the dollar now is off nearly 13% from its high this year in May. A similar trend marks the dollar's slide against currencies ranging from the Japanese yen to the Canadian dollar.
Several online-trading sites, such as Forex.com, Hotspot FX and others, allow individual investors to trade currencies. Discount brokerage giant Charles Schwab Corp. recently partnered with one of them, RefcoFX, to offer Schwab customers currency-trading opportunities. Last month, Gain Capital, Forex.com's parent company, posted a 40% surge in total trading volume led largely by retail investors, echoing reports from other firms.
Trading between banks and nonfinancial customers -- which includes individual traders -- accounted for 14%, or $252 billion, of the total daily trading activity as of April, up from $156 billion in 2001, when it was 13% of total activity.
FOREIGN EXCHANGE
See a description of some of the major trading platforms catering to small investors.
Three ways to play the weak dollar:
? Some overseas banks allow Americans to open accounts; EverBank.com offers foreign-currency accounts and CDs.
? Mutual funds like Franklin Templeton Hard Currency profit when the dollar falls.
? Trading currency futures provides the biggest potential rewards -- and risks.
But while it is possible to make large profits in trading currencies, it is just as easy to suffer devastating losses. For just like the day traders who flocked to stocks in the late '90s with little understanding of market fundamentals, the knowledge of many of today's new currency traders is limited. And because currencies trade as highly volatile futures contracts, investors are leveraging tiny sums into tens of thousands of dollars without realizing they can lose more than their original investment. Futures are time-sensitive contracts to buy or sell a particular commodity at a specified price on a future date. Unlike stocks, futures have an expiration date, though most investors close out their position before that is a concern.
With futures, investors can lose a lot more than just their original investment. That's because of leverage, which allows investors to control, say, $100,000 in currency with $1,000 down. Recently, an upward move in the dollar that saw it gain less than 1% on the euro would have resulted in a 67% loss to an investor betting the dollar would fall and using leverage of 100:1.
"This is absolutely not suitable in any way, shape or form for mainstream investors," says Laurie Cameron , an 18-year currency veteran and a currency strategist at J.P. Morgan Private Bank, a unit of J.P. Morgan Chase & Co.
For investors who want to increase their exposure to other currencies, there are safer alternatives than trading currency futures. Wealthy clients of private banks such as J.P. Morgan and Merrill Lynch & Co. generally can buy foreign currencies directly with a call to their broker. For more-mainstream investors, there are overseas banks, some of which allow Americans to open accounts.
If you are bullish on Canadian dollars, for instance, you can stop into any of Toronto-based Scotiabank's roughly 1,000 branches and open a checking or savings account. London's Lloyds TSB Bank offers U.S. residents offshore accounts denominated in pounds or euros, and term-deposit accounts in numerous other currencies. (Account applications are available online at lloydstsb.com.) New Zealand-based Kiwibank will open accounts for Americans, but at some point you must appear in person to prove your identity before withdrawing your funds. Americans can wire money into Hong Kong's Bank of East Asia, but you must fill out the paperwork in person. (The bank has a retail office in New York's Chinatown.)
The benefit of such an account: If the dollar falls, the foreign currency you own buys more U.S. dollars when you repatriate the cash. You can also often earn interest at better rates. Domestically, online bank Everbank.com offers savings accounts and CDs denominated in about 17 different currencies. Savings accounts require a $2,500 minimum; CDs need $10,000. If the dollar strengthens, investors will lose money, but deposits are backed by the FDIC.
Foreign-denominated inflation-indexed bonds offer another opportunity to benefit from a weak dollar. These bonds, like U.S. Treasury Inflation Protected Securities, provide a return above inflation because the bonds' payments routinely adjust to reflect changes in some local inflation index. Such bonds, available in Canada and Australian dollars, British pounds, euros and other currencies, pay interest income and offer capital-gains potential if the dollar falls. Clients at Wall Street firms such as Morgan Stanley have access to these bonds through their brokers.
For mutual-fund investors, Franklin Templeton Hard Currency is specifically designed to give exposure to foreign currencies. Morningstar Inc. labels it a world bond fund, because it invests mainly in Treasury-bill-type instruments in Europe and Asia. American Century International Bond is another option, as is T. Rowe Price International Bond. All are up between 6% and 11% so far this year.
Last month, ProFunds announced plans to launch two new mutual funds -- the Short Dollar ProFund and the Long Dollar ProFund -- which will profit as the dollar falls or rises, respectively.
Because of America's geographic isolation and the longstanding dominance of the dollar, Americans aren't typically accustomed to thinking about foreign currencies. "In Europe and Asia, they understand currencies better than equities." says Gain Capital Chief Executive Mark Galant. "In Asia, they are always talking about the euro/yen. Here, they are talking about Cisco, Dell and Microsoft."
Currency trading, conducted 24 hours a day, is the largest financial market in the world, amounting to more than $1.9 trillion in daily volume. By comparison, average daily volume on the New York Stock Exchange is a comparatively puny $45 billion so far this year.
But trading currencies is fraught with peril. Novice traders with as little as $250 are opening so-called mini-accounts and controlling as much as $50,000. And they are diving into currencies at historic highs -- similar to what stock-market neophytes did during the late stages of the bull market. These newly minted currency traders could face a worse fate if the dollar abruptly strengthens. That is because currencies trade as futures contracts in which traders employ vast amounts of leverage -- 200:1, in some cases.
Regardless of the risks, the lure of easy profits is attracting do-it-yourself currency traders like Paul Sullivan, 45. The Quincy, Mass., entrepreneur started trading currency two years ago "in search of a challenge," he says. He now counts it as one of his primary income sources. "My girlfriend thinks I spend too much time trading," says Mr. Sullivan, who wakes at 5:30 a.m. to cover trading hours in London and then New York. Nothing else, he says, "provides the thrill, the challenge and the monetary returns."
Steve Retz, a 24-year-old electronics designer in American Fork, Utah, says the first time he traded in currencies "I thought it was easy money." But before he knew it, "I blew $15,000 or $20,000."
Investors who want to play long-term movements in the dollar without taking on too much risk can employ only a small bit of leverage, maybe two to 10 times their original principal. That way, daily gyrations aren't nearly as volatile and an investor can hold a position over a longer period to take advantage of the broader trend.
如何利用美元下跌进行投资
美元汇率不断创出历史新低，普通投资者的外汇交易量出现大幅增长。从事外汇交易是风险最大的个人投资之一，但也有一些相对安全的办法使个人投资者从美元贬值中获利。
对美元的关注是美国人生活的一大转变，他们现在不仅仅要知道自己的投资组合表现如何，越来越重要的是还得搞清楚投资的都是哪些货币的资产。一些高级投资专家说，个人投资者应当持有一些外币资产，避免投资组合的收益因美元汇率下跌而受损。
夜间交易澳元原本是一些职业交易员才做的事情，现在小投资者也加入进来。到了清晨，他们再通过一些提供24小时交易服务的网站将澳元在伦敦市场上和欧元进行货币互换。但是，由于很多美国人不习惯用欧元或日圆来想问题，他们并没有意识到他们完全有更加安全的投资方式来利用美元的下跌：海外银行帐户、投资货币的共同基金和在美国即能买到的外国债券。
一连几个月，美元兑世界其他主要货币都在下跌，直到最近几天跌势稍有缓和。但和欧元相比，美元已经从其今年5月份的年内高点下跌了接近13%。同样，美元对日圆、加元等其他主要货币也在下跌。
一些网上交易网站，比如Forex.com、Hotspot FX等，都允许个人投资者炒作外汇。折扣经纪商嘉信理财(Charles Schwab Corp.)最近也与一家交易网站RefcoFX建立合作关系，使嘉信理财客户可以进行外汇交易。由于个人交易的迅速增长，Forex.com的母公司Gain Capital上个月的总交易量猛增了40%，其他公司也出现类似的情况。
截至4月底，银行与非金融机构客户（其中包括个人投资者）的交易量达到2,520亿美元，占到其每日总交易量的14%。2001年时，这些交易量为1,560亿美元，占其日总交易量的13%。
不过，虽然炒作外汇有可能大赚一笔，但投资者也很容易发生巨额亏损。就像90年末期很多人还在对市场基本面并不了解的情况下就蜂拥至股市一样，刚刚开始炒作外汇的投资者也几乎没有必要的外汇投资知识。由于外汇是用风险很大的期货合约来进行交易的，投资者少量的资金能产生巨大的杠杆效应，他们还没有意识到他们赔的钱可能要远远多于他们自己最初的投入。期货是在未来时间以一定的价格购买特定的资产的合约。与股票不同，期货合约有到期日，但多数投资者是在到期日之前就已经平仓了。
期货交易会使投资者的损失远远超过其最初的投资额。其中的原因就是期货的杠杆效应，比如，投资者只要最初投资1,000美元，就能控制10万美元的资产。如果一个外汇期货投资者断定美元会下跌而卖空美元，可最近美元兑欧元上涨了不到1%，那在100:1的杠杆效应下，他的损失已经相当于投入额的67%。
“对大多数投资者来说，这绝对不是一个适合的投资方式”，摩根大通(J.P. Morgan Chase & Co.)旗下J.P. Morgan Private Bank的外汇策略师、具有18年外汇交易经验的洛利?迪亚兹(Laurie Cameron)说。
对于那些想持有一些外汇资产的投资者，目前有一些比投资外汇期货更安全的方式可供选择。摩根大通和美林股市(Merrill Lynch & Co.)私人银行业务的富有客户通常可以直接打电话给其经纪商购买外币。对于大多数投资者而言，有一些海外银行也是允许美国人开户的。
比如，你看涨加元，你可以随时光顾一家总部在多伦多的丰业银行(Scotiabank)分行，开一个支票或储蓄帐户。这家银行有大约1,000家分支机构。伦敦的Lloyds TSB Bank可以让美国居民开设境外英镑或欧元帐户以及各种其他币种的定期储蓄帐户。（你可以登录lloydstsb.com在网上申请帐户）。新西兰的Kiwibank也允许美国人开帐户，但有时候你可能需要亲自到场证明身份才能取钱。美国人还可能把钱汇到香港的东亚银行(Bank of East Asia)，但还是需要到亲笔填写书面文件。（该银行在纽约有一家分支机构）。
这种外币帐户的好处是：如果美元下跌，你持有的外币可以在你取钱时兑得更多美元。你持有的外币的利率可能也要比美元利率高。在美国国内，网上银行Everbank.com提供17种不同货币的储蓄帐户和大额存单(CD)。储蓄帐户的最低存款额为2,500美元；大额存单为1万美元。如果美元汇率上涨，投资者可能就会损失一些，但存款至少是由美国联邦存款保险公司(FDIC)提供担保的。
外币计价的通货膨胀保值债券也是一种在美元下跌时不错的投资选择。这些债券很像美国的通货膨胀保值国债(Treasury Inflation Protected Securities)，其回报是高于通货膨胀率的。债券的利息支付会根据当地的通货膨胀指数来进行调整。你可以买到以加元、澳元、英镑、欧元及其他货币计价的这种保值债券，不仅可以获得利息收入，还可以在美元贬值时获得资本利得。摩根士丹利(Morgan Stanley)等华尔街公司的客户可以通过其经纪商买到这些债券。
对于想买共同基金投资者，法兰克林坦伯顿硬通货基金(Franklin Templeton Hard Currency)就是专门投资汇市的。Morningstar Inc.将之归为世界债券基金，因为这只基金主要在欧洲和亚洲投资类似美国短期国债的金融工具。美国世纪国际债券(American Century International Bond)基金和普莱斯国际债券(T. Rowe Price International Bond)基金也都可供选择。它们的资产今年迄今为止已经增值了6%-11%。
ProFunds基金管理股市上个月宣布建立两只新基金：ProFund美元空头基金和ProFund美元多头基金，它们将分别从美元下跌和上涨中获利。
由于地理的原因，以及长期以来美元在世界货币体系中的统治地位，使美国人不习惯用外币想问题。“欧洲人和亚洲人对外汇的理解强过股票”，Gain Capital首席执行长马克?盖仑特(Mark Galant)说。“在亚洲，人们总是在谈论欧元兑日圆的汇率。但在美国，人们聊的是思科(Cisco)、戴尔(Dell)和微软(Microsoft)”。
外汇交易是全天24小时都在进行，是全球最大的金融市场，每日交易量超过1.9万亿美元。相形之下，纽约证交所(New York Stock Exchange)今年截至到现在的交易量不不过450亿美元。
炒作外汇是很危险的。新手只要花250美元开一个小型帐户，就能买卖50,000美元的外汇。而且，他们是在外汇汇率处在历史最高水平的时候进入的，就好像炒股新手总在牛市尾期入场一样。美元一旦突然升值，由于杠杆的关系，初涉汇市的投资者的命运可能比股市新手更糟糕。
但炒汇赢利的想法还是吸引了像保罗?沙利文(Paul Sullivan)这样的投资者不顾风险闯入汇市。沙利文今年45岁，是马萨诸塞州一位企业家，他两年前为了寻找挑战开始在汇市交易。如今，这成了他主要的收入来源之一。“我的女友认为我在汇市交易上花的时间太多了”，沙利文说。他早上5:30起床关注伦敦和纽约的交易。他说，“不为别人，就是觉得这很刺激，既是挑战，又有回报”。
犹他州24岁的电子产品设计师斯蒂文?瑞茨(Steve Retz)说，第一次进行外汇交易时，“觉得钱真好赚”。可不知不觉地，“已经赔了15,000美元或20,000美元”。
