Some investors, when forecasting a localized (to the relative nation or source of currency) economic downturn or currency devaluation, choose to invest in foreign currency. I have seen portfolios that hold currencies from relatively stable economies to balance aggressive holdings. Is this ever a viable long-term strategy?
If I held 1 share of every company on the S&P 500 Index, I would gain total value by the end of the year (in this economy). If I held 1 valuation (dollar, peso, yen, etc.) of each currency, I would end the year with the same value as when I started (in this economy). Is holding large amounts of foreign currency ever a good strategy for long-term investors?