24/07 Indices, page-133

The Great Diversifier

My esteemed and inexperienced friends,

Another great day when millions of Australians went about their remunerative pursuits
(whilst a small minority stayed at home thinking of the great ClarkKent)

VGS, the cheeky bugger, knows when to hit an All Time High.
Today, was one such day. This chart is a sight to behold my esteemed friends.



The Aussie Dollar is an important diversifier for Australian investors who own AUD denominated assets.

In the short term high USD is bad for both US and Aussie stocks (but for different reasons)
But, all else equal, VGS benefits from a high USD.

Have you noticed how SP500 and ASX200 move in lockstep, and are both in a strong negative correlation with DXY (USD) ?
Look at this chart for the past few days: ASX200 (Green) SP500 (Yellow) DXY (Blue)








What do you want to own when DXY (blue) goes up?
VGS