Currency Exchange Rates: The International Wild Card

Currency Exchange Rates: The International Wild Card Splash image

Think you have a hot hand in the international markets because of big gains in your foreign holdings? Think again.

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That explosive growth may have less to do with insightful analysis on your part, and more to do with the falling U.S. dollar relative to many other currencies. Currency exchange rates are the wild card of international investing. You can venture overseas and pick the right stock, bond or mutual fund at the right time and see prices and the market rise—yet watch your U.S. dollar return vanish as the currency exchange rate moves against you. Or more happily, you can make a poor pick with less-than-optimal timing and still receive eye-catching returns if the exchange rate moves in your favor.

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