Expert Offers Portfolio Advice As Dollar Keeps Falling
December 22, 2009 by Special To Personal Liberty
As the U.S. dollar has fallen some 15 percent against the euro since March 2009, and it is widely expected to continue to weaken further, financial experts believe those who would like to protect their wealth and assets may consider changes to their portfolios.
Paul J. Lim, senior editor of Money Magazine, says he believes buying foreign stocks to diversify one’s portfolio is a smart way to reduce the risks associated with a falling greenback. In a recent article he pointed out that only 10 years ago U.S. stocks made up more than a half (54 percent) of the world’s stock market value. But today they only account for about a third.
"As investors shift out of the U.S. market, they exchange dollars for the currencies of countries where they’re doing their buying, reducing demand for the buck," he wrote.
Lim went on to add that the long-term decline trend suggests it may be a good idea to keep between 25 percent and 50 percent of one’s stock portfolio in foreign shares.
Meanwhile, other financial experts—such as those associated with the National Inflation Association—recommend buying gold and other precious metals as the dollar keeps loosing value.
Last Thursday morning, gold for February delivery traded at $1,115.90 per ounce on the Chicago Mercantile Exchange.