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ETF Specialist

Investors Have Failed to Time Currencies With Hedged ETFs

Attempting to time changes in foreign-exchange rates hurts long-term performance.

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Edwin Lefevre's classic tome, "Reminiscences of a Stock Operator," chronicles the career of Jesse Livermore, an infamous trader from the early 20th century. The book is often cited by traders and investors alike for the many lessons gleaned from Livermore's stock market trials--a mixed series of successes and failures. While his exploits may impart some teachable moments, they often overwhelm the larger message, which can best be summarized through the following quote from the book: "There is nothing like losing all you have in the world for teaching you what not to do."

Livermore apparently never took his own advice. His speculations made and lost several fortunes over the course of a career that spanned decades. If there's one lesson that investors should take away from his story, it is that trading and speculation are risky to one's wealth. Really risky. But Livermore's experience, and others like it, haven't stopped us from trying.

Daniel Sotiroff does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.