During the credit crisis late last fall, the U.S. dollar rose in value against other currency, but as the crisis has diminished, we started to see the U.S. dollar drop.
As we issue trillions of dollars in new debt, it’s likely the dollar is going to continue to drop in value.
So how do you profit from that? There are three things you can do.
One is commodity funds. Typically, as the dollar drops in value commodity prices go up. Mutual funds that invest in commodities or commodity stocks tend to do well.
International stocks will also do well, because any return from international stocks, when it’s translated back into dollars, will buy more dollars. So, that actually exaggerates the return coming from international mutual funds.
Likewise, multinational corporations look for U.S. companies that derive a good share of their profits from overseas. When that is translated back into U.S. dollars it will make for a higher profit margin, which typically will translate to higher stock prices.
