Thoughts on Savings in Different Currencies (bond, mutual funds, trading, invest)
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I own index and mutual funds that cover each a different region in the world. Some for the US (USD), some for Europe (EUR), some for e.g China (RMB).
In this way I diversify my savings over different currencies.
Currencies to me are very unpredictable.
I limit myself therefore to index / mutual funds in foreign currencies and do not keep foreign currency cash.
I, personally, would avoid that part of the market. Unless you want to start trading in volatility, I would avoid Forex trading to those with strong stomachs. And individual currencies are too unpredictable. Anyone making predictions about long term windows with money (especially 5 freaking years) is a scam artist. Heck even commodities have SOME logic behind them (supply vs. demand) and have less human BS behind it.
Stocks, bonds, mutual funds/ETFs, and others have higher returns anyway.
You have to be an expert to play that field. You can do it as said earlier in mutual funds and how they hedge or don't hedge their investments, international bonds and emerging market bonds. Take a 10 year window though, it'll be a wild ride.
You can get exposure to other currencies by investing in world bond mutual funds, such as GIM (closed-end fund) or ELD (an ETF). These are not emerging market bond funds, but a mix of emerging markets (such as Turkey and Indonesia) and developed world (Korea, Brazil).
You can fake exposure to other currencies by investing in foreign companies that get paid in their native currencies. I do not have the stones to invest directly in currencies or currency ETFs. However, in the past I have invested in Canadian energy companies which gives you exposure to Canadian dollar and oil. Both decent hedges against a falling dollar.
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