We called it right on the dollar. Alas, an ill-timed recommendation of BP. By Andrew Tanzer, Senior Associate Editor June 1, 2010 With blood in the streets in Athens and the euro sinking fast against the greenback, you might think that we were off base with our February article Make a Buck Off a Sagging Dollar. Well, no, not really.The story said that the euro, as well as the British pound and the Japanese yen, were unattractive for the same reasons we were down on the dollar: towering government debt levels, stagnant economies and aging societies. We encouraged readers to diversify outside the dollar via emerging-markets currencies, gold and gold-mining stocks. Most of our picks have held up well. For example, year-to-date through May 7, Pimco Emerging Local Bond (symbol PLBDX) gained 2% and Matthews Asia Dividend (MAPIX) rose 5%. Collectively, emerging markets have much lower debt levels than countries in the developed world, which is one reason many rebounded faster than industrialized economies. Gold is even more intriguing. SPDR Gold Shares (GLD), which tracks the price of bullion, has gained 9% this year. Tocqueville Gold (TGLDX), which invests in mining stocks, rose 11%. Huge budget deficits, rapid growth in money supplies, lack of confidence in government policies and currency instability provide fertile ground for gold bugs. BP update. After we went to press with Foreign Stocks Pay Dividends), one of our picks, BP, retreated 16%, largely because of the horrifying oil spill in the Gulf of Mexico. Oil is by nature a dirty and dangerous business, so there's an element of Russian roulette in picking oil stocks. BP's profits and dividends are still immense, but the risk of litigation plus the political fallout and damage to BP's reputation are unquantifiable. Thus, it is hard to recommend BP now. Advertisement The theme of enticing dividend-paying foreign stocks still holds. For example, British American Tobacco (BTI) and Unilever (UN), two other stocks cited in the story, derive the bulk of their profits in developing countries. It is hard to imagine that currency instability in Europe will affect the smoking, bathing and cleaning habits of people in China and Brazil.