Subject: Re: euros
For a know-nothing US based investor with all USD assets trying to hedge against the dollar falling over time, would it be “easier/safer” to buy a basket of foreign stocks rather than foreign currencies?

Sure.
If one is holding any financial asset for a reasonable length of time, it's the estimated real rate of return that matters. Companies have earnings, currencies usually don't. (inflation usually wipes out the interest rate, or most of it), so owning companies will offer a higher return...over time.

Personally I'm annoyed with what a bad deal most funds are, since most of them are cap weighted. If you can find something equally weighted (or almost anything but cap weight), and ideally with a tilt towards higher ROE firms, it would probably make a fine long term hold. It might do better than US stocks, or it might not, but it would be a certain amount of real diversification. The US administration has a firmly stated goal of dollar depreciation, so it makes sense not to dismiss the idea out of hand. They might accomplish their goals, they might not, but it would be silly to ignore them entirely.

The issue isn't where a company is based or where its stock is listed, but where their revenues come from. In the event of any possible problem with the dollar, better to have a US stock with mostly non-US revenues than a nominally non-US stock with mostly US revenues.

I think there are (relatively) more risks with US regulatory issues, broadly speaking, than with the US dollar per se. Tariffs tend to be positive for the currency of the country introducing them, but poor for their economy. That being said, a country can always drive its currency down by issuing more currency, if they are *really* determined.

Short term moves are not predictive, but the US dollar index (what a buck is worth compared to the other currencies with which the US trades) is at almost spot on 100 now. It was at about 108.25 on January 6, which I think was inauguration day. Generally speaking, a drawer full of US $100 bills has general purpose purchasing power 8% lower than it did then. This is true no matter what country the drawer is located in. Whatever your stock portfolio did since then measured in dollars, subtract another 8% to see how it did in general purchasing power for "stuff".

All that being said, I'm pretty cash heavy. I bought a lot of British pounds, a currency which has been gently rising against its trading peers for the last 8 years and offers interest rates of around 4 to 4.5% for almost any duration you choose. For now, I decided that's not such a bad place to park some money.

Jim