From the article: Value of the U.S. Dollar
What are some good ways to protect your investments against a dollar decline? What Do You Think?
Hedging Ideas
- Low-risk hedge: Foreign-currency ETFs: 1) Canadian dollar (NYSE: FXC): Canada has the second largest oil reserves after Saudi Arabia; 2) Euro (NYSE: FXE): Three of the top seven economies make up the EU: Germany, France and Italy (48% of the EU's GDP); 3) Japanese yen (NYSE: FXY): Japan is the second largest economy - its yen the most liquid in Asia and regarded as a safe-haven currency. Moderate risk: Dollar-priced commodities: 1) Oil (NYSE: OIL): As demand rises and the dollar falls, its value grows; 2) Gold (NYSE: GLD): Regarded for its intrinsic value, and as a hedge against inflation; 3) Copper (NYSE: JJC): A Chinese import used in construction. High risk: Direct purchase of stocks traded in Canada, the EU and/or Hong Kong. This can be done by means of an E*Trade Global Trading account. Stock pick: Suncor Energy (TSE: SU) of Canada, an oil producer. Such a strategy is high risk because there is no guarantee stocks will perform well. Consider all fees, too. Thank you.
- —Guest Tony Richardson
