Devoted to understanding the basics and fundamentals of investing

There was an article in The Wall Street Journal on May 3rd titled, "Latest Advice On Wall Street: Buy Currencies."  Eleanor Laise writes that many big brokerage firms are advising their US Dollar based clients to add some other currencies their portfolios.

So, do I agree?  In a word, yes.  The US has a large current account deficit.  While the US was one of the only major economies growing, other countries were happy to finance the deficit by buying our securities.  With 60 economies around the world growing, there is less incentive to invest in the US. 

Also, with interest rates rising the value of US Treasuries that held in portfolios is falling.  People have little incentive to add to a position that is going down. 
There are many ways to get FX exposure without buying currency directly.  You can buy a Global or EAFE mutual fund or Exchange Traded Fund (ETF).  You can buy US Agency debt denominated in Yen or Euros.  You can buy funds that focus on Emerging Markets. Investing in securities allows you to get returns from the stocks and bonds as well as from the devaluation of the dollar.

My firm employs some currency overlay managers.  These are the smartest FX traders in the world.  They add about 1% to 3% over time to our returns, and there are many years when the show losses.  Paint me dubious that the new pure currency funds that are proliferating will be able to add value to your portfolios.  Stick with International Stock funds if you believe the dollar is going into free fall.

Now go out there and make some money!