This video is in response to a question from abe on LinkedIN. Abe wanted to know if he should hedge the foreign currency exposure of his equities when the Canadian dollar is weak.

There is no question that investing globally is beneficial. Diversification is the best way to increase your expected returns while decreasing your expected volatility. Diversification is, after all, known as the only free lunch in investing. When you decide to own assets all over the world, you are not just getting exposure to foreign companies, but also to foreign currencies.

I’m Ben Felix, Associate Portfolio Manager at PWL Capital. In this episode of Common Sense Investing, I’m going to help you decide if you should currency hedge your portfolio.