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Re: [sharechat] (Svy) where to put money from a sale at the mo?

From:	jesse <johne777@hotmail.com>
Date:	Sun, 09 Jul 2000 21:21:45 +1200

Hugh
thats a nice list you have there. I'll start the ball rolling by helping
with (a).
You can eliminate 100% of exchange rate risk by taking out a forward
contract on the $NZ. Cost, zero. The trading bank (or whoever takes the
other side) will require approx. 20-25% cash deposit (of contract total)
for credit risk.
This has to be one of the few products/services that banks provide for
no cost. Many people don't bother because they dont know they exist, or
wrongly feel that you need big $ to make it worthwhile. If you hate
losing 10% on your share capital, why ignore a 10% loss on the exchange
rate, especially when you can manage that risk for nothing?
Anyway, just dont be put off investing in a particular market/fund
because of exchange rates. It is one risk that you can eliminate
completely.
cheers
jesse



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