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What the experts say

Hedging your dollar bets; Beware hidden mortgage fees; Money funds: Squeezed, but safe

What the experts say

Hedging your dollar betsGoldman Sachs chief economist Jim O’Neill has been down on the American dollar for at least 10 years, said William J. Holstein in The New York Times. But now O’Neill says the dollar may not have much further to fall. “A year from now I personally expect the dollar will be stronger against most European currencies,” he says. Investors bearish on the dollar should shift their focus to Asia, where economic growth in China, Japan, India, and “even tiny Singapore” could lift the value of these countries’ currencies. One way to buy into these currencies is by investing in mutual funds or exchange-traded funds focused on Asia. Just be careful: Stock markets in many of these countries are near all-time highs and won’t keep going up forever. But “some experts say that even if Asian stock markets suffer fairly sharp corrections, they may be smart long-term bets.”

Beware hidden mortgage feesHomeowners struggling to keep up with mortgage payments are just now discovering certain questionable fees charged by lenders, said Aleksandra Todorova in SmartMoney. Lenders charge delinquent borrowers fees for everything from overnight delivery to drive-by property inspections, according to a recent study by University of Iowa law professor Katherine Porter. The fees “go well beyond the typical late charge,” in many cases adding up to thousands of dollars. And delinquents aren’t the only ones who get hit. “Unsuspected and unexplained charges can be tacked on to a borrower’s account as soon as they are late with a single payment,” Porter says. With that in mind, study your mortgage statements for unusual charges. “Most statements don’t include detailed explanations of the fees charged, but you can request a breakdown.”

Money funds: Squeezed, but safeThe current credit crunch is even affecting money funds, said Jonathan Burton in Marketwatch.com. Some investors are wondering how safe their cash really is. Money funds “are considered one of the most secure parking places for cash.” But, unlike banks’ money-market funds, money funds aren’t insured by the Federal Deposit Insurance Corp. That said, investment firms “have given money-fund holders an implicit guarantee that the net asset value of their fund will not fall below $1 a share.” While money funds’ performance may suffer, says Bankrate.com financial analyst Greg McBride, individual investors need not lose sleep worrying about their money funds actually losing value. Financial institutions, he says, will “move mountains to keep that net asset value at $1 and preserve investors’ confidence.”

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