How to diversify your Australian portfolio with currencies

Diversifying your portfolio is when you spread your investments across different asset types to reduce your overall risk. If one investment goes down in value, your other investments may still be doing well.

This article shares steps to ensure better trading performance.

Buying international shares

You can access foreign shares through an online broker, which will allow you to buy and sell shares on overseas stock markets. It diversifies your portfolio because you’re not just relying on the Australian market.

If you want to diversify your portfolio with currencies, you can do this by buying international shares. This way, you’ll have exposure to different economies and may be less affected by problems in the Australian economy. You can access foreign shares through an online broker, which will allow you to buy and sell shares on overseas stock markets with your forex account.

Investing in real estate

Investing in real estate is another way to diversify your portfolio. You can buy property in another country or by investing in a real estate investment trust (REIT).

Investing in real estate is an excellent way to diversify your portfolio because it exposes you to another asset class. Real estate can be a more stable investment than shares, so it can help to balance out your portfolio. And, if you invest in property in another country, you’ll also have currency exposure.

Using currency-hedged ETFs

If you want to invest in an overseas market but don’t want the risk of currency fluctuations, you could invest in a currency-hedged ETF. These ETFs aim to track the performance of an underlying index, but they hedge against currency risk.

Currency-hedged ETFs can be an excellent way to diversify your portfolio because they give you exposure to another market without the risk of currency fluctuations.

Buying foreign currency

Another way to get exposure to foreign currencies is to buy them directly. You can do this through a foreign exchange broker.

Buying foreign currency is an excellent way to diversify your portfolio because it gives you direct exposure to the foreign currency market. It can be a volatile market, so it’s important to remember that your investments could go up or down.

Buying foreign bonds

Another way to get exposure to foreign currencies is to invest in foreign bonds. These are debt securities issued by foreign governments or companies.

Buying foreign bonds is an excellent way to diversify your portfolio because it exposes you to another asset class and different economies. And, if you invest in bonds denominated in a foreign currency, you’ll also have currency exposure.

Using currency futures

Currency futures are contracts that allow you to buy or sell a currency at a future date. They’re traded on exchanges and can be used for hedging or speculation.

Currency futures can be an excellent way to diversify your portfolio because they expose you to the foreign exchange market. And, if you use them for hedging, they can help protect your portfolio from currency fluctuations.

Using currency options

Currency options are contracts that give you the right, but not the obligation, to buy or sell a currency at a specific price on a certain date. They’re traded on exchanges and can be used for hedging or speculation.

Currency options can be an excellent way to diversify your portfolio because they expose you to the foreign exchange market. And, if you use them for hedging, they can help protect your portfolio from currency fluctuations.

Investing in foreign stocks

Investing in foreign stocks is another way to get exposure to different economies. You can do this through an online broker.

Investing in foreign stocks is an excellent way to diversify your portfolio because it exposes you to different economies. And, if you invest in stocks denominated in a foreign currency, you’ll also have currency exposure.

Investing in foreign mutual funds

Investing in foreign mutual funds is another way to get exposure to different economies. These are investment vehicles that pool money from investors and invest it in a portfolio of securities.

Investing in foreign mutual funds is an excellent way to diversify your portfolio because it exposes you to different economies. And, if you invest in funds denominated in a foreign currency, you’ll also have currency exposure.