Aftershock by David Wiedemer & Wiedemer Robert & Spitzer Cindy

Author:David Wiedemer & Wiedemer, Robert & Spitzer, Cindy
Language: eng
Format: epub
Publisher: John Wiley & Sons, Ltd.

Smart Investing for a Falling Dollar: Buying Euros

A very obvious way to profit from the coming fall in the dollar is to buy euros. The easiest way to buy euros is through an ETF (exchange traded fund) trading under the symbol FXE (a Rydex Investments product). Each share of FXE sells for the price of 100 euros. You can buy this ETF just like a stock through your normal brokerage account.

You can also buy euro funds that are invested in euro government bonds or euro corporate bonds. These have the advantage of paying interest on your money, as well as the appreciation on the euro. We recommend going with euro government bonds, given the issues many corporations may soon face. Funds we recommend are listed on www.aftershockeconomy.com/eurofunds. Although many other currencies will rise relative to the dollar, the euro is the strongest and easiest to trade. The euro zone will likely see significant problems among its members with some countries possibly dropping out of the euro. However, despite some problems, we expect the euro to easily survive the coming Aftershock.

We should add that even though it isn’t as sophisticated as investing in euros or euro bond funds, buying gold is also a way to benefit from the relative rise in euros. Gold can be easily sold for euros so it always tracks the euro price even if you buy it in dollars. Hence, buying gold with dollars is indirectly an automatic investment in euros. Gold is shunned by many sophisticated investors, but the reality is that it is a reasonable way to invest in euros while also gaining the appreciation that gold will have on its own, outside of the relative rise in the euro versus the dollar. More details about gold are offered later in this chapter.

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