The Hard Truth About Soft Currencies

by Marco Polo
Daily Reckoning

Some countries have consistently strong finances and stable currencies. Others are serial offenders, with high inflation and regular devaluations. Does this matter for you, as an investor in stock markets? The evidence is surprising.

Last week I received an email from a reader, Rakesh L., with some interesting suggestions in it. My last article, “Putting options in their place”, dealt with some of the issues and risks to do with using put options, a type of financial derivative.

Today I’ll turn to Rakesh’s second point, about the importance (or otherwise) of hard currencies. Here’s what Rakesh had to say:

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