For years, investors have used the carry trade to help earn profits from disparities in foreign-exchange and interest rates. But recently, that trade hasn't worked as well, raising questions about whether the carry trade has ended.
In the following video, Fool contributor Dan Caplinger discusses what the carry trade is and what has changed to make it less effective as an investment strategy. He goes through some of the factors that would be necessary for it to re-emerge as a profitable strategy, pointing to a key sector of the international stock markets and pointing out several stocks that have suffered as a result of the strategy's failure.
Gold has outshined the stock market with strong returns since 2000, but more recently has given way to big declines. The Motley Fool's new free report "The Best Way to Play Gold Right Now" dissects the recent volatility and provides a guide for gold investing. Click here to read the full report today!
Copyright © 2009 The Motley Fool, LLC. All rights reserved.