International shares are an important part of all of our investment portfolios.
Why? Because over the long term they have delivered very similar returns to Australian shares. By investing in both Australian and international shares your portfolio still has the same expected return, however the 'ups and downs' of the portfolio should be smoothed out a little. When Australian shares are performing poorly, international shares may be performing better and smooth the overall portfolio returns, and visa versa.
Currency changes are an important part of this investment process, and indeed why international share investments have generally performed poorly over the past 5 years. During this time the Australian dollar has risen to its current level of above US 80 cents.
All else being equal, you want to buy international assets with a strong Australian dollar, as it is now, and well them with a weaker Australian dollar - increasing your profits in Australian dollar terms. So, even though there have been a number of weaker years of returns from the international shares, now is not the time to turn your back on that asset class given the strength of the Australian dollar.