Our currency basket

Nobody wants to have paper money. They don't trust Central Banks' expansion. Nobody wants to buy stocks. It's too dangerous right now. Remember the saying: "Sell in May, and Go Away". Real estate: are we nuts? Bonds, the new bubble. So, what do we do?

Those of you who know what is going to happen should focus on the good investments. As we don't know for sure, we try to diversify avoiding the high hurdles. Liquid real estate in places with no bubble, dividend stocks with low debt, bonds of more serious countries... But to diversify this way, we need to use different currencies. With this post, we just wanted to show you how we find the different currencies according to our model, so that you may overweight certain countries and underweight others.

Against EUR (you can easily calculate it against other currencies playing with the same data):

Swiss franc (CHF): 35.24% overvalued.
Australian dollar (AUD): 2.74% undervalued (surprisingly).
Canadian dollar (CAD): 8.56% overvalued.
British pound (GBP): 4.53% overvalued.
Japanese yen (JPY): 5.87% undervalued.
Norwegian krone (NOK): 11.73% overvalued.
US dollar (USD): 3.82% undervalued.

In general, while the euro is resisting, the crosses are close to their fair value, except the premium you pay for the Swiss franc (excessive from our point of view, being NOK a better option).