Investing in Currency

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Investing in foreign currency is making a bet on how it performs relative to the U.S. dollar, and using a fund manager can help make informed decisions about various countries' currencies. Put money in foreign money with investing advice from a certified financial planner in this free video on personal finance.

Part of the Video Series: Investing Information
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Video Transcript

It's possible to actually invest in money. How do you invest in money, or in currencies? One of the ways or one of the bets that you're making when your interested in investing in a foreign countries currency, is you're interested to see how that particular currency performs relative to the dollar in the U.S. There are opportunities to invest in this type of commodity or currency by utilizing an exchange traded fund or a mutual fund that specializes in currencies. It's really a great opportunity to utilize those types of investment vehicles when you're interested in investing in currency, primarily because of some of the bumps you can hit in the road if you're trying to do it yourself. Like, how do you judge trading on a foreign market? How do you judge the exchange rates and the differences between the dollars you place in investing and what you'll get back out in the end? By utilizing a mutual fund or an exchange traded fund to do this for you, the manager helps make decisions on when to invest and buy and sell in different currencies. In addition, you're not limited to just one countries currency, you're given the opportunity to invest in a wide variety of currencies across the world. Different countries and continents Africa, emerging markets like Brazil, India, our close neighbors like Canada, Far East, that kind of thing. By utilizing these types of funds you're able to invest all over and get lots of opportunities for a better return on your dollar.

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