In this continuation video of Brian Haskin’s discussion with William Blair Macro Allocation Fund manager Thomas Clarke, Mr. Clarke uses the euro as an example of how to dynamically manage a currency position on a long/short basis. The euro has been overvalued for the last few years, but the additional geopolitical pressure between Greece and its creditors made the euro a smart short in both the long and short term – a good aggressive portfolio position.
Mr. Clarke also offers his opinion on emerging-market currencies, and discusses the importance of allocating risk. The media often makes it appear as though currencies are extremely volatile, but Mr. Clarke contends that their volatility usually falls somewhere between bonds and equities, making them a logical part of a well-balanced portfolio.
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