Foreign Currency Denominated Mutual Funds?

[trailrunners]

With all the talk of hyperinflation and the falling dollar, I'd like to try to get diversified into some foreign currency. As I will be adding to an IRA again this tax season, I was wondering if there are any good foreign currency denominated mutual funds that anyone could recommend? I'd like to roll a couple of my other IRA's into one of these mutual funds, and I'm completely getting out of any mutual funds that are not socially and environmentally responsible funds.

Also, if I'd like to diversify into gold, in case the economy really tanks, could I roll over an IRA into an investment in gold? I'm pretty sure I couldn't do this without a penalty, just wondering if there are any loopholes there. However, I don't like gold simply for the fact that it's extraction is so environmentally damaging.

Any assistance would be greatly appreciated!:hi:

[eallen]

1. A couple of answers.

I'm not sure what you mean by a "foreign currency denominated mutual fund." If the mutual fund invests in stocks, it doesn't much matter whether it is denominated in dollars, for US investors, or in Euros, for European investors. The underlying value of the stocks will be the same in either case. There are plenty of mutual funds that invest in foreign stocks. Be aware, these carry plenty of risk, including the risk of foreign currencies going down against the dollar!

Everbank (www.everbank.com) offers foreign-currency indexed CDs. Thus, you can purchase a three-month CD valued at AUS$20,000, which earns interest at a rate of about 5%. In three months, it will be worth AUS$20,250. What that will be worth in US$ obviously depends on how the US dollar does over the next three months. They offer foreign-currency CDs based on the Euro, a variety of European currencies, the Yen, the Pacific peso, and quite a few others. The interest rate depends on the currency chosen.

I think both of these are quite reasonable forms of diversification, though both carry their own risk. Many US investors, observing Bush's policies during his first term, are more and more putting their money abroad. Warren Buffett, for example, holds a significant bet against the US dollar.

[thoughtanarchist]

2. EZU...

EZU is an ETF (Exchange Traded Fund) that tracks the European Monetary Union. It has performed very well since the dollars decline.

Don't fall victim to the alarmists... I think this economy can take quite a bit more abuse before a total meltdown.

If you're young enough to ask for help on this, you're too young to want to invest in gold. It's complicated and does not provide the same consistant returns you'd get with a diverse portfolio of stocks and bond funds...

Also, I'd shy away from "rolling over" your IRA. The most costly thing you can do is move your $ around.

good luck and stay diversified.

[Yupster]

3. When Senator Edwards

released his financial records during the campaign his number one holding was the Euro-Pacific Growth fund sold by American Funds.

I remember it because it surprised me since he's from Noerth Carolina where outsourcing of textile jobs has been such a big issue, I hadn't expected him to outsource his investment portfolio.

[thoughtanarchist]

4. no foul in edwards...

no jobs have been outsourced to europe

it's the cheap labor markets...

India
china
etc.