I only trade currencies in stock holdings... and it is only 1 reason of many to buy a stock...
consider August 2002- airline stocks in trouble, USD was expected to lose ground on the Euro... KLM Airlines trades on the NYSE back then and when you look into the company, you see that they also bought into 7 years worth of jet fuel at year 2000 prices... they have reasonable debt and are still showing resillience against the troubled airline economy.... and yet, their stock has been punished... albeit badly. bought it just shy of $9 US as American Depository receipts...
so yes, i did invest on 'thinking the USD would drop' but, also lowered my risk because of these other trends I saw for the future...
1. that the airline industry would turn around and in 6 years time, more people will fly than at any other point in history.
2. oil prices would escalate.... ie, time of unrest and war in the middle east... ie, I invested in jet fuel at 2000 prices (which was already a bargain)
3. the Euro would raise against other global currencies. by buying a depository receipt of a european company in US money, the stock would gain if the dollar loses to the euro... even if the stock price in europe remains the same.
4. i bought into an industry in correction, where you would see takeover offers and turnaround situations... KLM was bought out by Air France.
all in all, the investment provided an excellent return, but not solely for one reason. that is the only way i'd look into currency investing.
it provides a much greater return than the currency %age change. it turned out to be a 10 bagger.
bought KLM for 8.91 in 2002 price adjusted from the merger of around $5 something.... sold AIR FRANCE/KLM in April 2007 for $52.09 that's over a 200% per year rate of return. and fairly low risk, also.
stocks. low risk, high return... if, and only IF you do your proper homework.
