Are you diversified outside the US dollar? How?

[turbo6bar]

The inflationary growth of the US money supply is a bit worrisome. To hedge risk, I'd like to incrementally diversify out of the US dollar. Do you hold CDs in foreign currency? Gold? Hard assets? I am sitting on a lot of cash, and I'm worried that rampant growth in US dollars will eventually lead to 1) deflationary contraction, or 2) devaluation of the US dollar. Obviously, I am prepared for scenario 1, but scenario 2 would hurt a good bit.

[RallyJon]

I involuntarily own a bunch of illiquid foreign stock. I've gotten some paper gains from currency fluctuations. Wish I could sell some...

[Dottore]

Euros and Sterling.

Get some of each. Both very strong and likely to remain so.

[jrdavid68]

Novice investor here. If I have some cash in an Etrade IRA, how would I go about investing in Euros? Is there a particular stock/fund that one can buy?

[turbo6bar]

I second the last post. I don't want to dump a lot out of the US dollar, and I don't want to make a big lump sum exchange. I'd like to gradually shift some assets out of US dollars. An ETF would be ideal.

[turbo6bar]

Yikes, US dollar taking a dive today and Wednesday. Hit a low for 2006 on speculation of a US rate cut and a possible hike by the ECB.

[trader220]

A weaker dollar is back door stimulus for the US economy, Take a look how weak it was in the middle 1990’s. The Yen actually appreciated to 80 in April 1995.

[turbo6bar]

I think it goes both ways. It stimulates the US economy, but also reduces incentive to invest in US debt. I would not mind a falling US dollar coupled with an improving trade balance and reduction in government and private deficits.

[MRM]

For any of us who are not full time professional traders or brokers, the best way to get some Outside US exposure is through mutual funds. My wife and I have our 401(k)s in 5 funds - 20% in each fund. One of them is an Asian mutual stock fund. It has been doing well. That is about the best way for ordinary people to get into OUS investing.

Also, most US multinationals have huge exposure. Investing in a company like 3M is almost like a US/forreign mutual fund.

[Joeaksa]

Euro's here.

[beepbeep]

Swiss franks!

[coldstart]

Canadian dollar!!

We have: (a) low debt; (b) a sound economy; (c) political stability; (d) fiscally conservative government; (e) lots of oil; and (f) great sweaters.

On the other hand, you may have already missed the boat. The CDN dollar has gone from $0.64 USD (equals $1 CDN) to ~$0.88 USD (down from the high of ~$0.92 USD)

[trader220]

Swiss FranC ?

[competentone]

Originally posted by Dottore
Euros and Sterling.

Get some of each. Both very strong and likely to remain so.

All major currencies are fiat currencies -- there is nothing of intrinsic value backing them.

All fiat currencies are being inflated -- some faster than others, but all are being inflated for the benefit of "politically connected" banking/financial interests and to the detriment of the productive individuals. (The inflation of the money supply causes price inflation; it is a "tax" few understand they pay.)

If you're savvy, you can play one currency for another -- but remember you won't have the "inside information" others in the market will have. (You do understand that there are generally no laws prohibiting Federal Reserve members -- or other central bankers -- from communicating privately, or trading for themselves using information they know about policy decisions regarding money supply?)

In the end, the only really solid protection against fiat currencies is hard assets. But hard assets, whether precious metals, or real estate, or collectable Porsches all have risks of their own.

For me -- though I rarely have an "excess cash" problem -- it comes down to an "always active" investment mindset. With the fiat currency structure we have in the world today, you can't just expect to buy something that you can forget about and it will be "safe" for the next x-number of years. You have to be constantly aware of the changes going on in the financial world and be "readjusting" your investment strategy based upon the constantly changing economy.

[livi]

I will be investing in US dollars while it is diving.

[competentone]

Originally posted by livi
I will be investing in US dollars while it is diving.

Will that be before or after the Chinese sell the trillion dollars they are sitting on?

[svandamme]

mwah , my pay check, at one point or another, before it actually was a paycheck, has been composed from dollars, yens, yuan's euro's roebels, scheckels and everything in between all those... how's that or diversifiying?

[livi]

Originally posted by competentone
Will that be before or after the Chinese sell the trillion dollars they are sitting on?

Good point! Maybe I can buy even cheaper from theme. Whole sale discount.

[tabs]

When I buy a Foreign Mutual fund I am buying a basket of stocks that are listed on different Foreign Exchanges. While it has currency implications this is not why U are buying this type of fund. You buying good companies with growth potential and in a sense the health of that countries economy as reflected in their stock market. The REAL thing U are buying is a Diversification of Stock Markets.

[tabs]

Originally posted by Wayne at Pelican Parts


I'm increasing my percentage of Intl mutual funds.

-Wayne

How interesting...on Wednesday nights PBS Business Report had an Analysts from one of the big investment houses talking about Foreign Equitys, and that they over the past several years have done quiet well. People have been putting money into them, because the US Stock Markets have been lackluster in its performance, and the Foreign equities offered a decent return by comparison. The Analysts feeling was that money was going to start going into the US Equitys market, from and at the expense of those Foreign Equitys, because the US Equities market is underpriced and represents good value.

Its quiet clear that the action is going to be in US Equitys for the next few years.