Another New Year

Hope your start to the New Year wasn’t as bad as your archetypal Glaswegian probably had.  Mine was pretty good, if woolly, but at least I didn’t wake up on a park bench wondering where my front teeth were.
2009 is dead, long live 2009! Seriously, if I hear one more reference to CDS, CDO, CD-‘whatever’ (as my twelve year old would say) I think I might get another job doing something useful.  I’m quite good at framing pictures if anyone wants to employ me…though I might be a little expensive – you know, bankers’ bonuses and all.
The title is “Another New Year”. I’m afraid outside of the sentimental value of having to remember 2010 instead of 2009 on cheques, it means very little in the financial world, or at least it should do. You cannot take out the human element of trading from the world’s economic activities.  Imagine if you controlled a few billion dollars: where would you put it in 2010?  Would you buy shares in Tylenol if you were expecting a bad day on Friday morning (the First, if I have to remind you), or would you look at the other 364 days of the year?  Depends, is the best answer I have for you, and no it’s not a reference to Lisa Marie Nowak.
I hate to say it as a day trader at heart, but in FX the long term view is going to make you the big bucks this year.  Take a view based on sound fundamentals and go for it. Chances are 2010 will be a trend year, interspersed with some wild swings in sentiment as economies splutter into life.  Much akin to the first car you ever had, unless of course your parents bought it for you in which case, go away, I have nothing to add to your life. Some days it would work fine, others it would fail you in front of [insert here boyfriend, girlfriend, partner. We’ve all been there], learn to roll with the punches, stick with your belief that it will start and have the AA (or North American’s AAA) on speed dial.
The BIG question is where to stash your cash this year: who do you bet on? Some market players are bigging up the emerging markets buy versus the established currencies as the trade of 2010, but I’m not convinced.  Having just said the ‘trend is your friend’ you will probably make the most in FX by being a bit of a flirt with the markets.  Some long term views coupled with some profit takes (i.e. not too greedy) will get you the biggest bang for the buck.  If all else fails, maybe someone will employ me as a framer!

Disclaimer: The views expressed are the opinions of the writer and whilst believed reliable may differ from the views of Butterfield Bank (Cayman) Limited. The Bank accepts no liability for errors or actions taken on the basis of this information.


Money Markets by Butterfield Bank’s Phil Turnbull