The Fed has hinted that it plans to purchase another round of long-term Treasuries next week in hopes that it will push rates lower and encourage lending and help revive the sagging economy. As with anything in the markets these days, there are ways to play the Fed’s moves with exchange traded funds (ETFs).
The worry for many U.S. investors is the future of the greenback, because more dollars in circulation dilutes the currency’s value, says Ben Baden for U.S. News & World Report. [The Rush to Foreign Currency ETFs.]
Although the effects of quantitative easing will be keenly felt one way or another, investors can take steps to alleviate the impact on their portfolios.
The dollar remains the undisputed global reserve currency.Experts argue that it’s important to be diversified among currencies so that you’re protected if the dollar falls in value. Some ETFs (such as Rydex CurrencyShares) allow investors to invest in physical currencies, while others (such as WisdomTree) invest in non-U.S. money market securities or a combination of money market instruments to give exposure to non-U.S. money market securities or rates. [Markets, ETFs Waiting to Exhale On Eve of Elections.]