May 28, 2002; Non-U.S. Energy Stocks Can Enhance Portfolio Performance

Non-U.S. currencies apparently bottomed in late January and since mid April have been advancing sharply (see Chart).  While we can see what has happened, we don’t pretend to

know what will happen.  We do have two strong beliefs on currency.  One, it is better for our peace of mind to have some diversification from our home currency to which most of our financial assets are otherwise tied.  Second, energy value can be quite independent of currency value because oil is the largest worldwide commodity in its own right after currency itself.  Non-home-country energy stocks meet both those portfolio preferences.