The decline of the greenback has captured the attention of newscasters around the globe.
Its effect on the economy is a mix of positives and negatives.
If you’re an investor, though, there are a number of ways to potentially profit from the falling dollar – if you’re up to speed on what’s out there.
Following are a few things you should consider:
Commodities are hard assets that tend to hold their value over a period of time. Gold is a commodity considered by many to be a safe haven in times of currency devaluation. You can purchase commodity- and gold-related securities through mutual funds and exchange-traded funds (ETFs).
Domestic Large-Cap Stocks
Because large companies often generate substantial revenue overseas, they have income in other currencies that can be converted into a greater number of dollars. Many large companies have departments dedicated to currency management.
Foreign Stocks and Bonds
When the dollar falls, prices of securities denominated in other currencies tend to rise. Adding such securities to your portfolio can help cushion it against a drop in the dollar.
Investing in the currency you believe will show the greatest strength against the dollar is a way to profit from a falling dollar. You can use this strategy by investing in currency-focused ETFs.