The US dollar has been in a long-term decline since the turn of the twenty-first century, especially with the availability of a strong alternative currency in the form of Euro, a currency backed by thirteen developed nations. The euro was created as an alternative to the dollar, and it carries behind it an economy approximately 80% of the size of the US economy. With the rapidly rising value of the euro, from a low of $.85 to a high of $1.45 and with more to come, is it prudent for you, as a wealth builder, to diversify some of your holdings into euros?

Sentiment against the dollar has been generally negative for the last seven years or so, and in spite of brief respites, the dollar has entered into a long term bear market. Generally speaking, a bear market is recognized when one is more than fifty percent into it. This must mean that there may be further significant downside to the dollar before it picks up again. This assessment is also causing the major banks across the world to diversify outside of the dollar. Some of the best methods to move out of the dollar include:

1. Investing in companies that get their income in multiple currencies. Multinational firms fit the bill in this category, and stand to benefit the most if much of their income comes in stronger currencies.
2. Buying companies that deal with physical resources. As you are well aware, none of the major currencies is directly pegged to actual physical commodities. Thus switching out of dollars into firms that deal with physical resources (mining companies, metal holding companies) gives you indirect control of physical assets.
3. Buying physical assets directly - such as gold and silver, or buying their equivalent exchange-traded-funds. This is a good way to play the corresponding bull market in precious metals.
4. Purchasing bonds denominated in other currencies - particularly the Canadian and Australian dollar, since these are resource rich countries. Diversifying further by buying bonds in Euros will enrich the mix further.
5. Saving in a currency of your choice, such as Euros, at banks such as Everbank.com. This is a direct play in currencies.

Please note that there is no mention of trading in currencies directly, as that is best left to professionals.

Saving in euros is a relatively weak and indirect methodology for playing this currency shift, though if you have a lot of money to save, it may be useful to place some of your money directly in Euros. We would much rather prefer investing in funds that either deal with world-wide real-estate or other productive activities, or by purchasing resource shares (mining, metal holding corporations). Furthermore, diversifying into a basket of currencies as opposed to one other currency is a far more stable way to handle the current, ongoing decline in dollar.