Regular reader, retiredinprescott asks...
Roger, do you think these three ETFs are also a play on a declining US dollar?
He is referring iShares EAFE (EFA), PowerShares Intl Div Achievers (PID) and WisdomTree Intl Mid Cap Div Fund (DIM).
The short answer is yes.
Any type of foreign exposure insulates against a weak dollar. Depending on the specifics of the foreign exposure you may insulate a lot or a little against a weak dollar. For example, Turkey is in the middle of a rough patch. Turkish assets won't necessarily help for the time being.
The three funds mentioned above may or may not be ideal foreign exposure (I own PID for a couple of clients) but from the top down the first decision needs to be do you want foreign exposure, yes or no. From there top down process would be to then figure out the best way to capture foreign exposure. The three funds are fairly broad, which is a valid way to go or you could choose a narrow approach with individual stocks or single country products.
PID and all of the WisdomTree International funds help solve an issue I have been writing about for a while which is the tradeoff between yield and diversification.
Wikinvest Wire
2 comments:
Hi Roger.
I found you when I was looking for info on PID. I'm intriqued with it, although I've never bought anything outside of my ROTH or 401k. My question for you is: is this a bad move for a taxable account? Is it worth it?
Another consideration: I've never had an accountant; I do all my own tax returns since my finances have generally been pretty simple. Will the tax issues with owning something like PID force me to hire an accountant or is it something I might be able to figure out on my own?
Much thanks to you!!
Michelle
Hey Roger! Thanks so much for (very) quick email response. Can I now ask you if you still like PID for an 8-10% portfolio weighting? I know you've recommended it before . . . The price and the expense ratio have gone up . . .
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