When might EWI change components in the Stable Currency Index?
To create the SCI, we chose currencies that had the best long-term situations from many points of view in their respective global quadrants. Nevertheless, we can envision a shift in the conditions that would cause us to rethink one or more of the currencies — such as a military coup, a communist takeover, or a radical change in policy by a monetary authority. Any such event would cause EWI to consider changing the composition of the SCI. Having said that, good fundamentals typically attend tops and bad ones attend bottoms. Frequent changes to the SCI might mean the index would repeatedly take on new components at tops and unload them at bottoms, which is how most people lose money in their portfolios.
