A typical U.S. investor might have all of his or her money in U.S. dollar-denominated assets, as well as his exchange traded funds (ETFs) and salary earnings. By putting some of your money into international investments you can still make money even if the dollar weakens, reports Dan Caplinger for The Motley Fool. If you already have assets in foreign currency, then you might already have reaped some rewards, as the British pound costs $2, the euro is $1.40 and the Canadian dollar is worth more than the American counterpart for the first time in 30 years. When the dollar looses ground, investments in foreign currency get an automatic boost in value, which is one of the reasons why international markets have outperformed U.S. stocks.
ETFs give investors a wide choice of foreign currency from which to choose. CurrencyShares Trust tracks around eight of them. Some of them and their performance year-to-date include:
- CurrencyShares Euro Trust (FXE) – up 7.0%
- CurrencyShares Japanese Yen Trust (FXY) – up 4.8% for the last three months, having launched in February
- CurrencyShares Mexican Peso Trust (FXM) – up 4.5%
- Australian Dollar Trust (FXA) – up 17.6%
Read the disclosure, as Tom Lydon is a board member of Rydex Investments.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.