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1700 Rockville Pike, Suite 400

Rockville, MD 20852

infoasi@assetstrategies.com

1-800-831-0007 (Toll Free)

301-881-8600

9 am - 5 pm EST

Monday - Friday

 

Asset Strategies International is an industry leading full service tangible asset dealer specializing in precious metals, foreign currency and rare tangible assets.


For other products and services:

www.ASIPMDirect.com

800-831-0007

301-881-8600

Fax: 301-881-1936

9 AM - 5 PM EST

infoasi@assetstrategies.com

 

Asset Strategies International

1700 Rockville Pike, Suite 400

Rockville, MD 20852

Why You Should Look at Foreign Currency as an Investment

Many people think that investing in a foreign currency sounds exotic and full of uncertainty. However, a surprising number of investors are moving into alternative investments like foreign currency to counter the increasingly volatile stock market.

It’s exactly because of the uncertainties that investors face in today’s world that it makes sense to invest in foreign currencies. Diversifying out of the U.S. dollar can deliver both long-term and short-term benefits to savvy investors and it’s more important now than ever.

Foreign Currency Exchange

The key benefits of investing in foreign currency include:

  • Diversification. The foreign exchange market offers investors a way to diversify away from potential risks associated with solely using the U.S. dollar as an asset class.
  • Liquidity. The world is your oyster. The foreign exchange market is the largest and most liquid market in the world, with an average daily volume in excess of $5 trillion.
  • Low Fees. Most foreign exchange trading doesn't involve paying a commission, but rather, a bid/ask spread that tends to be tighter than equities. With the right foreign currency broker, you’ll find low premiums and competitive exchange rates.

You can consider global currency as a type of uncorrelated asset class and for a truly diversified portfolio, one must consider a varied allocation of assets. On average, over time, asset classes perform differently, exhibiting less variation in returns than a portfolio with only one asset class, so diversification should lower risk, help investors stay the course, and achieve financial goals over the long haul.

 

Euro Dollar Yen Pound

Why Now?
Although the foreign exchange market was previously dominated by investors from large banks and financial institutions, it has become more accessible to everyone. It has always been critical to have currency exposure, but the importance for individuals has increased dramatically in the past few decades. Despite the current sociopolitical turmoil and looming trade wars, the world is getting smaller and more interconnected. Your investments should reflect this fact.

Overseas investors may see the U.S. dollar as a safe haven during times of turmoil, which artificially drives the dollar up against other currencies. The U.S. dollar has been in high demand despite low rates because it is considered safe, and despite yields being historically low, many use U.S. Treasury bonds to store reserves. Keep in mind that the current strength of the U.S. dollar is just a reflection of the weakness of other global currencies.

Political turmoil and struggling economies can undermine any currency's value. Any international event can affect exchange rates; triggering a flood of investors moving to the currency of a country that offers higher interest rates, or fleeing one that's too stingy. Currencies are constantly in flux, driven by shifting global economic forces, and the investor needs to be ready to buy or sell on short notice.

What’s the Best Strategy for Investing in Foreign Currency?
Investors used to trading stocks, mutual funds, and ETFs may find currencies pretty “foreign,” pardon the pun. Unlike investing in stocks, where one stock can go up without another stock necessarily going down, currency trading is done in pairs, meaning you buy one currency and sell another. Although many combinations are possible, the majority of trading is focused on eight world currencies: the U.S., Canadian, New Zealand, and Australian dollars, as well as the British pound, euro, Japanese yen, and Swiss franc.

 

Forex Market

Experts say to build your investment portfolio on well-established foreign currencies like the ones we just listed. Typically, currencies that are weak compared to the U.S. dollar and show signs of promising revaluation are the best options for foreign currency trades.

So, when deciding which assets to put in your investment portfolio, keep in mind your location, your tax reporting requirements, and your currencies. If you’re both an international traveler --or American citizen living abroad-- and an investor interested in speculating with major currencies, keep your travel money separate from your foreign exchange investments to avoid confusion.

Go Long or Play It Close to the Vest?
Both short-term and long-term trading of foreign currency can be profitable.

In long-term trades, investors focus on positional trading. They look for a trend and then follow it for weeks, months, or even years. Savvy investors purchase based on expectations, but sell based on facts. Many hold on to multiple foreign currencies in order to preserve their wealth in case of a national emergency or sudden currency devaluation, investing in their future as well as for financial trades.

In short-term trades, investors focus on trading with currency pairs, trading one for another at the current exchange rates. Short-term trades offer high rewards, but come with big risks. The volatility of the global market is also the very reason why these types of trades can be so rewarding. Since a spike in value happens quickly, it’s possible to quickly capture a significant gain.

Currency Exchange

Where do I Invest in Foreign Currency?
order foreign currency onlineThe best place to obtain foreign currency for investment purposes is actually not a bank, but a foreign exchange dealer. When researching a dealer, do your due diligence. Stick to one in your own country because it is easier to verify their authorization.

So, look for the best place to exchange foreign currency within the U.S. rather than signing up with foreign brokerages via the internet. The reason for this is simple–it’s often difficult to determine how well-regulated a foreign brokerage might be and your exchange may be subject to additional foreign transaction fees.

ASI can help you with your foreign currency needs and offers over 100 currencies for exchange. We are a non-bank, foreign exchange dealer who offers foreign currency banknotes and international wire transfers. We offer some of the lowest premiums on foreign currency exchange available, and our rates are even more competitive than most banks.

ASI also offers an online service to purchase over 60 foreign currencies in amounts less than $2,000 USD. This service provides the ease of purchasing online and extremely competitive rates.

Diversify out of the U.S. dollar with global currency and your portfolio will thank you.

Contact ASI

1-800-831-0007 (Toll Free)
301-881-8600

Fax: 301-881-1936

infoasi@assetstrategies.com

8AM - 5PM EST, Monday - Friday

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    Fax: 301-881-1936 infoasi@assetstrategies.com
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