Daria: Hi everyone you know I just want to talk to you today a little bit about something that you may think isn’t bothering you one with because you’re not going travel overseas, so what do you care for US dollar is weak or strong. Oh I got news for you. It may not hit home immediately if you’re not planning and doing any overseas travel but it will eventually catch up with each and everyone of us right here on the United States, a week dollar poses a lot of problems for all of us.
Number one, the reason it does is because we don’t manufacture very much in the United States anymore. Therefore most of the goods that we consumed in this country are imports. Now the good news on manufacturing is that what we do manufacture and sell overseas were selling a lot more of because its cheaper for other countries to buy with the dollar as we because it has been.
But the fact as a matter is we who live here in the United States. I mean just check you Christmas shopping or holiday shopping at any of the stores particularly the discounters. You take a look at where those goods are manufactured I defy you to find something that isn’t made in China or some where else overseas and not US made. So as the dollar continues to weaken, we end up starting to pay more and more and more for what we buy such as foreign cars, foreign wines, clothing, toys, you name it where buying it here in the United States.
Now if the US economy continues to weaken because don’t forget when the dollar is weak against other currencies it is precede that the United States is not strong as it has been in the past. And actually the dollar has the weakening for almost five years now. so the perception of us being weaker could is protected and prolonged any further could end up with so many of the countries that buy debt to finance are over consumption, well decide. You know what we have all these dollars and the US isn’t making enough for us to spend this dollars on, we’re going to go trade them for some other currency. If that happens, that would be worst case scenario then it doesn’t matter that US companies that sell overseas are making more money. We are going to be in big problems, in big trouble but for those of you that are convinced as I am that this weak dollar will continue further until we get a hand on our consumption and our governments spending in this country, there are some ways that you can protect your own portfolio.
Number one, because they have performed less than steadily over the pass few years they really poise now to make a run, this big multinational corporations like the general electric, pick a company that sell something overseas swill be making more money and more money translates to more benefits for shareholders and shareholders then beat up the price of the stock. So you want to take a look at where your positioned in your US stock portfolios or your US mutual fund portfolios to make sure that you have a large showing of multi-national corporation as this particular point in time and not a lot of US manufactures and other industries that are base solely and do business solely in the United States.
Secondly, you want to take a look at dividend paying none US stocks around the world. Probably through either in exchange traded fund or a mutual fund. It’s a lot easier, a lot safer to have that kind of diversification than for you to work with the broker to try and do it on your own. Lastly as a weak dollar investment, you want to try if you can stand the volatility of it from very small percentage of your portfolio in gold because gold works conversely with the US dollar. When the dollar arises, gold tends to weaken in price and with the dollar weaken, gold has 0428 price. It’s been over $750.00 an ounce for quite sometime now.
But as I said that’s a very volatile investment that should be no more than five maximum 10% of your portfolio and only for those of you that are not risk a verse. What you want to do is sit down with your financial adviser and talk with that adviser about things like, Am I positioned to take advantage of overseas versus being solely depended on the performance of US stock and buying markets? Maybe we should discuss, should I make a currency play by investing in foreign bond fund of foreign money market fund. Something of this nature and then also for those as I said who are risk not risk of verse, take a look at some gold. These are some ways to protect your investments for the weak dollar and as I said, I don’t think we’re going to see a strengthening dollar unless the rest of the world starts to really slow economically. Thanks for joining me.
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