ALTHOUGH THEY'VE

now become part of pop-culture lexicon, most people didn't own shares of Enron or

and were essentially unaffected by their demise. Yet as we first wrote over

, you wouldn't have known it from the wall-to-wall media coverage and the government's knee-jerk regulatory response. For weeks, news outlets had a field day covering the excesses of greedy executives and the government-enacted

, the biggest reregulation of the securities industry since the Great Depression. It was front-page news.

Yet the dramatic drop in a far more important asset one we all own has been essentially passed over by investors and observers alike. The U.S. dollar, as measured against most of the world's other major currencies, isn't just weak it's downright sickly. It has dropped 17% in 2003 against the Canadian dollar, reaching a 10-year low. It's at a three-year low against the yen, a five-year low against the British pound, a six-year low against the Australian dollar and a near-all-time low against the euro.

Let's wake up, people.

As we wrote last week, the market tends to test us. How long before we start realizing this is a trend worth learning about? And while following the dollar might seem fairly esoteric compared with watching stocks or interest rates, a weaker currency's implications are ultimately more meaningful to our national prosperity. Because, more than stocks, bonds or any other asset, Americans own dollars.

We hold them in our pockets, and in savings and checking accounts. We earn and spend them. We live, think and breathe in dollars. So regardless of your views on the economy or who you voted for, the fact is that as a nation we're "long" dollars in a big way. And although the vast majority of us have never considered the need to hedge, there's hasn't been a better time in years to reduce your exposure to the greenback.

While plenty of more educated pundits seem to be able to spin a falling dollar as a positive for U.S. businesses, I can't really see any upside to the fact that most people's biggest holding is the weakest asset around. And although I'm not an economist or an academic I'm just a hardworking trader looking to make a buck I think you've got to be smoking the good stuff to believe a weak dollar will have a beneficial impact on the nation's bottom line.

To me, the thing to do right now is dump the dollar. Don't worry you needn't start learning about currency futures or shopping for a California king-sized mattress to stuff with euros. There are a number of simpler strategies at your disposal to help you benefit from this developing trend.

Most notably, as I've been writing for the past few weeks, I believe now is the optimum time to go abroad and focus on non-U.S. investments. The theory is that as the dollar underperforms, so will most U.S. assets. Thus far, that seems to be the case. Just examine the performance of Vanguard's three large international index funds, each of which tracks a different region of the world's markets. Over the last two years, the benchmark S&P 500 Fund is now underperforming both the European Stock Index fund and the Vanguard Pacific Stock Index fund. Compared with many emerging markets like Latin America or Turkey, the degree of underperformance is even more dramatic.

Green With Envy

APPLET PLACEHOLDER: archive= height=300 width=450

Data from Oct. 25, 2001 to Oct. 24, 2003 Source: Factiva

The weakening dollar hasn't just benefited foreign stocks, but foreign bonds as well. Just take a look at the returns of both closed and open-ended bond funds, names like Alliance World Dollar Government Fund II, Aberdeen Asia-Pacific Income Fund, Aberdeen Commonwealth Fund, Templeton Global Income Fund and American Century International Bond. Each has gained more than 20% over the past 12 months. Yet given the sorry state of the greenback, I believe they still are solid long investments in today's market environment.

And because a weakening dollar is a harbinger of inflation, I'm focusing on hard assets and commodity-related investments such as Southern Peru Copper, Potash and gold play ASA Ltd.. I also continue to be encouraged by the solid performance of the bank loan funds we highlighted a few weeks back. Because their rates reset, or "float," they are among the only income-oriented names I'm aware of that can thrive as interest rates rise.

Yes, I know that the Nasdaq is sizzling, and that Intel is up 90% this year, and that many think General Electric is an absolute steal under $30. But as we often point out, investing is about making choices. And since you can't bet on everything, you've got to play your ace every time. Right now, the biggest trend in the capital markets hands down is the weak dollar. And because trends tend to persist and the herd is still nowhere to be found that's where I'm devoting new money.

Jonathan Hoenig is portfolio manager at Capitalistpig Asset Management, a Chicago-based hedge fund. At the time of writing, Hoenig's fund held positions in many of the securities mentioned in this article.