Overnight, the Australian Dollar (A$) (AUDUSD) fell a few cents, which the media worked to be the worst fall in four months.
"Slumping Australian dollar has its worst day in four months" – Fairfax
Identifying the cause of currency movements overnight or even month-to-month is virtually fruitless and next to impossible in 95% of cases. For example, was it iron ore, Kim from the North, or some economic data which sent the dollar lower?
What investors should be concerned about is investing in quality businesses for the long-term.
But, obviously, transferring money to and from overseas can be costly. Therefore, being a little more savvy with your transfers might go a long way to better investment returns over time.
How I'm investing in the Australian Dollar
I will be the first to admit I did not expect the Australian dollar to rise above 80 US cents in 2017.
However, the recent strength made me pause for thought and ask myself if now is a good time to be investing more money abroad. Currently, my US investment portfolio is a far larger part of my wealth, simply because I see better — and more — opportunities abroad.
Remember, too, it's not just US companies which trade on US stock exchanges. I bought shares of the Dutch bank ING Groep NV, better-known in Australia as ING Direct, the online bank.
It is about the size of National Australia Bank Ltd. (ASX: NAB). Almost 50% smaller than Commonwealth Bank of Australia (ASX: CBA), by market capitalisation.
But during its most recent half, 700,000 retail customers joined ING, taking its total retail customer base to 36.5 million across its 40 operating countries.
ING shares also offering a 4.3% dividend, so investors are not missing out on income.
Don't get me wrong — it's not a risk-free investment.
However, this is a perfect example of why I think more investors should be considering investing abroad, using the recent highs in the Aussie dollar to their advantage.
Foolish Takeaway
If you do not invest abroad, just know two things:
- It's easy to set up a US brokerage account and totally worth the paperwork because…
- More than 98% of the world's investment opportunities are outside Australia.
I rest my case.
