My friend is going to be living in Mexico for the foreseeable future. The majority of his portfolio is a globally diversified portfolio held in the US. The vast majority of the holdings are USD denominated. While these have performed well in USD terms, it has been relatively painful in MXN terms. The majority of his future obligations (rent, groceries, etc.) are denominated in MXN. It hasn't helped that the MXN has outperformed most international currencies also.
1. So the questions are: Should he hedge against the currency risk of a strong MXN? So far I've been of the view that that is not necessary and that a globally diversified portfolio gives you significant currency derisking. However, I'm starting to have second thoughts about this.
2. While I'm still not convinced that we should do any hedging, I would like to know how regardless. Assuming we do want to hedge against this risk, how? I know how to hedge for a specific period but this needs to be an indefinite hedge. What products should I consider?