Investing often comes down to playing the cards you are already holding just as much as those you are dealt. To that end, I ve recently added additional exposure to the Mexican peso, one of the year s worst-performing currencies in a year that has seen other emerging market assets like the Brazilian real soar.

Even a few years back, including an asset like the peso in your average portfolio would have been nearly impossible. Thanks to innovative products such as CurrencyShares Mexican Peso Trust, trading the peso long or short is as simple as buying GE.

I ve held the peso for years but only recently upped my investment. The most attractive factor right now is the price action itself. Having recently kissed a near yearly high, the peso has overcome anxiety over drug violence, swine flu even a downgrade in sovereign credit rating by Fitch. That s all bad news -- but it s bad news that is, at least for now, known to the market.

Although a security that s eclipsing a historic peak can often seem too high to buy, breakouts are simply the market s way of demonstrating in the clearest way possible an imbalance of demand and supply.

Comprar Caro, Vender M s

CurrencyShares Mexican Peso (FXM) Year-to-date
Source: BigCharts.com

There s also support from Mexican equities hitting new highs such as America Movil, Grupo Aeroportuario Del Sureste SA de CV, Coca-Cola FEMSA, and other names within iShares MSCI Mexico.

The peso s lag is surprising: After all, it s an emerging-market commodity currency, encompassing two big trends now dominating investor interest. But after a historic 2008 collapse, the currency has spent the better part of the past year channeling within an 8% range before finally breaking out toward the end of last month. That leaves plenty of room to run: For the peso to regain even September 2008 levels would require a roughly 20% gain from current levels.

CurrencyShares Mexican Peso yields about 3.65%) should make the peso of interest to adventurous investors seeking alternatives to money-market funds yielding 0%. Carry trades like this, of course, would quickly unravel if the U.S. dollar suddenly jumped sharply or investors appetite for risk in general were to disappear.

What intrigues me most is that, despite the recent breakout, the peso along with Mexico in general continues to suffer from an incapacitating image problem in the United States. Made in Mexico isn t exactly considered a brand benefit, and the country continues to be linked in the headlines more with illegal immigrants and drugs rather than viable investment opportunities. I recall the same sort of doubt expressed back in the early 2000s about Brazil, Columbia and other Latin American countries now dominating investor attention.

The old market maxim is that one should aim to be long doubt, short hope . The peso s ability to break to new highs, even amid continued negative public perception and a sovereign downgrade, is an objectively bullish sign.

At the time of writing, Hoenig s fund held a position in the Mexican peso.