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Currency Diversification Of Investments: Is It Worth It?

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  • Marija Anastasovska

Abstract

Portfolio management reduces the dangers of investing while simultaneously increasing the likelihood of return. Investors are searching for the optimum investment plan based on their assets, risk tolerance as well as determined goals and objectives. Portfolio managers analyze their financial needs and provide the best and most risk-adjusted investment strategy. There are many ways on how one can diversify his or her portfolio investments and one of those is by diversifying into different currencies. This paper looks at the benefits of currency diversification by looking at the movements of the major currency pairs through the years and at their volatilities. Additionally, by looking at the status of each currency in the pool of reserve currencies, one can make a distinctive choice on whether it is suitable and justifiable to invest in it and diversify one’s holdings.

Suggested Citation

  • Marija Anastasovska, 2022. "Currency Diversification Of Investments: Is It Worth It?," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 16(1), pages 366-374.
    • Handle: RePEc:isp:journl:v:16:y:2022:i:1:p:366-374
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    currency; diversification; portfolio; management; benefits; return;
    All these keywords.

    JEL classification:

    • A - General Economics and Teaching

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