Currency trading is a zero-sum game, and it is unrealistic to expect individual investors can beat the professional in this market. Maybe a wiser strategy is to buy foreign currency denominated equity, as recommended by the Oracle.

Wall Street is increasingly encouraging individual investors to bet on foreign currencies, and money managers are rolling out a host of new funds to allow them to do this.

With many strategists expecting the U.S. dollar to continue to weaken in foreign-exchange markets, a number of Wall Street firms, including Morgan Stanley and Lehman Brothers Holdings Inc., have begun advising individual investors to put a small portion of their assets into euros, yen and other currencies that are likely to increase in value as the dollar declines. Spurring the strategy in part are concerns that a falling dollar could boost inflation, which in turn could hurt prices of bonds and some stocks. Holding foreign currencies in a portfolio could help investors hedge against problems a falling dollar could create, these strategists say.

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Still, foreign-currency funds are proliferating, with offerings ranging from mutual funds that buy money-market-type investments denominated in foreign currencies, to funds that use complex strategies including trading derivatives and short-selling, or selling borrowed securities in order to profit from an expected decline. Some funds employ leverage, or borrowed money, to magnify their exposure to currency movements. But this strategy also can exaggerate any losses, and can make funds more volatile.