There is another opportunity to play the weakening $A again this financial year, and not only for international investing. A year ago we forecast the $A would fall significantly. At the time we said the potential currency decline created an opportunity, particularly for savvy SMSF and self-directed investors, to shift funds offshore and benefit from the weakening local currency. That play paid off. A portfolio that allocated 30% offshore would have returned around 7.5% – that’s double the return of the Australian share market and with a lot less risk and volatility. The success of the strategy highlights that asset allocation strategies like this are becoming increasingly important for SMSF and self-directed investors. The good news is we think that play is on again this financial year. (VIEW LINK)
Well worth taking the time to read this article.
Excellent article. $US became my holding for $A cash 3 months ago and has returned much better than bank rates already. I see much more risk in holding high dividend Australian stocks , when you have no control over the share price in lead up to dividends.