How to Invest in Foreign Currency
By Billy Fisher
NEW YORK (MainStreet)--Investing in currencies is an endeavor that is foreign to many individual investors. However, a little homework on the topic can go a long way towards building a diversified portfolio and reaping the benefits that accompany it. Here are some points to consider if you find yourself wanting to venture into the space.
For investors who have significant cash positions in their portfolios, adding foreign currency exposure may make sense. "A lot of people perhaps are sitting on the sidelines in light of the current market environment and they're probably sitting in cash that's earning little or nothing," said Bill Belden, managing director and head of product development at Guggenheim Investments. "When you're concentrated in a single type of currency, you're taking on a degree of risk that you probably don't fully understand and certainly wouldn't feel comfortable with should you understand it."
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