I've successfully scared the heck out of some of you with
predictionsof
the dollar's looming demise.
Yet I've not said it nearly as forcefully as Swiss banker
Dr. Konrad Hummler. Here's what he wrote in his recent
Wegelin Investment Commentary: "It's time to take advantage
of the recovery of the U.S. dollar to get one's currency
diversification in order."
Read between the lines. He's telling you the dollar is
going down ... hard.
But don't just take my -- or Dr. Hummler's -- word
for it
But we're not the only ones giving such
advice. If you've been paying attention, then you know that
Warren Buffett came out against the dollar in an August
New York Timeseditorial.
And Hummler, in his commentary, points out two other
investing luminaries who have taken high-profile stands
against the dollar:
Now, you can heed these words of warning, or you can stick
to your U.S. investing guns. But allow me to suggest that the
latter is an irrational position.
After all, there's limited downside to diversifying into
great companies that do business outside of the United
States. There is, however,
significant downsideto investing in nothing but
dollar-denominated investments.
It'd be crazy to stash your entire life's savings in one
company. It's just as crazy to stash your entire life's
savings in one currency.
But there's opportunity in the meantime
Despite the dollar's precarious, debt-laden position,
the currency is in a pretty good place relative to other
world currencies -- thanks to investors having abandoned
emerging markets for perceived financial safe havens during
the recent financial crisis.
In other words, should you opt to sell some of your
dollar-denominated investments (like U.S. stocks) and buy
investments that are denominated in Chinese yuan, Brazilian
real, South African rand, and so on and so forth (like
foreign stocks), you have stronger purchasing power today
than you'll likely have in 6 or 12 months.
Basically, this is a
temporary opportunity. But there's still time to
take advantage.
Have a look at this table
To make this simple, I've put together a quick chart of
popular U.S. investments and their foreign counterparts --
all of which are recommended by
Motley Fool Global Gains
and which offer similar advantages with significantly
more foreign currency exposure.
If You Own ...
You Should Look At ...
Procter & Gamble (NYSE: PG)
Uniliver (NYSE: UL)
Scotts (NYSE: SMG)
Yongye International (Nasdaq:
YONG)
Gap (NYSE: GPS) Continued... |