3 ms·
> I might use an FX hedge on a foreign investment to protect against foreign currency volatility I sort of think that's an abuse of the term "invest". Sure you
by landryraccoon 9y ago
> I might use an FX hedge on a foreign investment to protect against foreign currency volatility
I sort of think that's an abuse of the term "invest". Sure you're investing in some kind of instrument that is highly affected by the value of the USD, but you're not really investing in USD. You're not long USD by holding that investment. By that metric people who short Bitcoin or Bitcoin exchanges are also "investing" in bitcoin.
- dsacco 9y agoYou are long USD if you believe USD will remain relatively stable while many other securities actually diminish in value for various reasons. Even if the investor is not ultimately correct, this qualifies as investing. Investing involves risk management, not just positive returns, and hedging a long position with a position in something like USD is not comparable to shorting.