Will McClatchy at ETFzone.com

Sinking Dollar Presents Great Currency ETF Opportunities

As the above two comments suggest, you are describing the opportunity that occurred, not the one available to investors today. In investment parlance this is called chasing returns. It is not too dangerous for traders who watch their screens constantly and can bail out in time, which is likely since most dollar/other-major-cur... ratio fluctuations are not catastrophically swift.

It is, however, folly to suggest that long-term investors should invest in foreign assets BECAUSE the dollar has fallen for many years in a row. That is, while it is quite possible or even likely the dollar will go down a bit more, the more the dollar underperforms the more likely it is to return to historic performance. This is not the same as calling it to reverse, but it is a strong caution.

Since you do not mention what strategy or audience you are talking to, your comments are surely valid for some investors. But if they are meant for the trader, you do not provide the targets and time periods useful for the trader (where will the dollar bottom out and when?). For the typical passive long-term investor, overweighting international heavily now is frankly dangerous.

Will McClatchy
Editor
ETFzone.com