Play a Stronger Dollar with RYSBX
Sep 5th, 2008 | By Charles Delvalle | Category: ETFsRepublicans like to call themselves the party of fiscal discipline. But Charles Delvalle says it’s actually Democrats who are more likely to reduce the federal budget. If Obama makes it to the White House, you may want to bet on a stronger dollar with the Rydex Strengthening Dollar ETF (RYSBX).
This from Investor’s Daily Edge:
Since 1938, Democrats increased the budget deficit by about 8.3 percent while Republicans grew the deficit by 9.7 percent - a nearly 20 percent increase. Perhaps most startling is what happens when you change the sample date from 1938 to 1946.
From 1946 to today, Democrat presidents pushed the deficit up by 3.2 percent per year. Republican presidents, on the other hand, increased the budget deficit by 9.7 percent (thanks to Reagan and Bush Jr.). In other words, since 1946 Republican presidents have outspent Democrat presidents by almost 3-1. So much for the party of fiscal discipline.
This matters because huge budget deficits decrease the value of the US dollar.
So odds are, if a Democrat becomes president, we may actually see deficits decrease, and that would lead to a stronger dollar.
The easiest way to play a stronger dollar is by buying the Rydex Strengthening Dollar ETF (RYSBX). This ETF moves up two percent every time the dollar moves up one percent.
Source: Who Makes the US Budget Deficit Larger – Democrats or Republicans?
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Charles Delvalle is a self-taught market-timing professional and value analyst who uses a combination of technical indicators and fundamental research to achieve consistent gains on stocks, commodities and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering great companies on the cheap. He questions government reports and the status quo. In addition to swing trading options, Charles is also Co-Editor of the monthly advisory service - INCOME.
