I'm currently in the situation that most of you probably were about 4-5 years ago. The currency of my home country (UK) has been pretty strong for a number of years, but lately I've become increasingly bearish on the prospects. So, I was considering getting into other currencies to reduce my exposure to a large decline in the pound. I have a fairly strong conviction on this. My question is what % of total assets is it prudent to place abroad? I could just go 100% long a basket of foreign currencies, but then if I am wrong and sterling rallies 20%, I have suffered a major capital loss. Also I have to consider that my expenses and tax bills are in sterling too. I consider the potential risk if I'm wrong to be a move back to the old highs - that's about 7-10% risk vs the dollar and Euro. I'd be interested in anyone's opinions, especially people who tried hedging against the dollar's decline in recent years. What size forex/gold position did you have, did you find it easy or difficult to sit out the volatility, did you have any method of when to get out etc (e.g. a stop).