Is it a good idea to invest in foreign stocks/etfs to hedge against the weak dollar?
I am considering purchasing foreign stocks/ETFs as I expect the dollar to continue to weaken. As I am purchasing within the US using dollars, is there any down side to doing that or should I be purchasing those same stocks from within the country of origin. eg. I want to buy UK financial stocks. I could transfer US dollars to a UK Pound account, and trade through a UK trading site. Or I could use my US trading account to buy those stocks through an ETF I found.
Can anyone explain which is the best approach and are there any hidden gotchas?
I would buy the ETF instead of investing directly overseas, unless you are talking about very large sums of money. There is alot of spread in foreign exchange, and it may be difficult to invest in foreign securities as a non-citizen.
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