NEW YORK (Money Magazine) - Look out below! Those three words pretty much sum up how the U.S. dollar has been faring in global currency markets.

The greenback dropped almost 25 percent against Europe's common currency, the euro, from January 2002 through mid-October 2003, and on Tuesday broke to its lowest level ever.

Over that time, the dollar has fallen 15 percent against the Japanese yen.

There are several reasons for the weakness. First, for years we've been buying a lot more goods and services from abroad than we've been selling there, which tends to depress our currency.

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Low U.S. interest rates also undercut the buck since, all other things being equal, investors tend to favor the currencies of countries with higher rates.

And the growing budget deficit is raising doubts about the long-term strength of the dollar.

There's a widespread feeling among currency traders that the dollar would have dropped even more if some countries weren't manipulating their currencies to gain a price advantage over U.S. goods in international markets.

Add it all up, and many observers believe the dollar could fall another 10 percent to 20 percent over the next few years, although it's likely to fall more vs. Asian currencies than vs. the euro.

Following are three dollar plays that you don't have to be George Soros to execute. That's not to say I'm recommending that you try them.

"You have to be careful about making investment decisions based on currency forecasts," warns Arnim Holzer, a senior investment strategist at Deutsche Asset Management. "Currencies can be very unstable, and they have a tendency to move unusually at times."

I agree completely, and those risks can be substantial in the first two strategies.

The most direct way to profit from a sliding buck is to open an account that's funded with a foreign currency you believe will rise against the dollar. Previously, this tactic was pretty much limited to investors able to fork over six-figure sums.

But Everbank, an online bank that operates out of St. Louis, offers accounts in 17 foreign currencies with minimums as low as $2,500 (although the bank pays interest only on balances of $10,000 or more).

The latest addition: a money-market account (with a $10,000 minimum) denominated in Chinese yuan or, as it's now known, the renminbi -- "the people's currency."

Let's assume you think the euro -- which recently traded at $1.18 -- will climb against the dollar over the next year. You could open a one-year euro CD, in effect converting your $10,000 into 8,475 euros ($10,000 divided by $1.18).

Assuming you earn 1.4 percent -- Everbank's recent rate for one-year euro CDs -- you'd get 8,594 euros at the end of the year. If the dollar stays at $1.18, you'd have the equivalent of $10,141 for a gain of 1.4 percent. Nothing exciting there.

But if the euro were to rise, say, 10 percent to $1.30, your 8,594 euros would convert to $11,172, for an 11.7 percent return. (Actually, you'd get a bit less, since Everbank levies a 0.75 percent conversion fee to open your account and again to cash it out.)

Of course, the currency effect can cut both ways. If the euro were to drop 10 percent to $1.06, then your 8,594 euros would be worth $9,110 -- an 8.9 percent loss.

I consider this strategy closer to speculation than investing because your profit hinges on guessing correctly about the future direction of the dollar. Even professional traders who can move quickly in and out of markets can get caught on the wrong side of currency movements.

So unless you're adept at discerning the various economic factors and government policy decisions that determine exchange rates, be wary of committing more than a token amount of cash to one of these accounts.

Another way to capitalize on the dollar's weakness is to find an investment that moves in the opposite direction. Gold fits the bill, in part because many safety-conscious investors flock to gold when the dollar weakens.

Merrill Lynch research shows that over the past 10 years, gold has had a correlation of -0.84 vs. the dollar -- not quite a perfect mirror image (correlation -1.0), but extremely close.

While the dollar dropped 23 percent and 9 percent, respectively, vs. the euro and yen for the two years through September, the price of gold climbed roughly 30 percent. Gold mutual funds on average spiked for gains of just over 100 percent.

It would be a mistake to assume a reprise of these returns over the next couple of years. As I pointed out in my May column, "Going for Gold," gold is one of the most flighty investments around, not to mention one susceptible to long periods of very low or even negative returns, especially after big run-ups.

So I see a gold play as even riskier than foreign currency accounts.

This is a more indirect play on the ailing buck, but I like it much better than the previous two. You invest in a broadly diversified fund that spreads its money around the globe (the approach I prefer) or in funds that specialize in countries or regions (a harder task unless you really know these markets).

Whichever way you go, be sure to buy a fund that does not regularly hedge against currency fluctuations.

If the dollar falls in value against the home currencies of the stocks in your fund, the currency change acts as a tailwind, boosting your return. Through the first nine months of this year, for example, Morgan Stanley Capital International's EAFE index -- which includes foreign stocks of developed nations -- gained 10.1 percent in local currency terms.

But with the dollar falling, U.S. investors earned 18.4 percent. Quite a tailwind.

Had the dollar rallied by the same magnitude against the euro, you'd have confronted a headwind, and the EAFE's gain in local currency would have shrunk to just over 2 percent.

This may seem the same as investing in a foreign currency deposit account. But there's an important difference.

Equities generally have much higher inherent long-term profit potential than bank deposits. That means you have a better shot at earning a positive return even if the currency effect goes against you.

For the five years through the end of 1999, the dollar gained roughly 15 percent against European currencies. Nonetheless, funds specializing in European stocks managed to gain an annualized 22.4 percent in U.S. dollar terms because the underlying return on the stocks themselves more than overcame the unfavorable currency swing.

Adding some foreign shares also lowers the volatility of your portfolio, since U.S. and foreign shares don't always move in sync.

You'll have to decide which of these three strategies, if any, you feel comfortable with -- and are confident you can pull off. But I'll go with the one that not only gives me the chance to profit from a falling buck but also makes my portfolio less jumpy.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged." He also answers viewers' questions on CNNfn's Money & Markets at 4:40 PM on Monday afternoons.