Should the decline in the dollar affect our current investing decisions, and if so, how?

1 Answers

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  +1 Votes 1  0

  Pinyo on Sep 12, 2011

  The simple answer is no, and the reason is that would be making the mistake of confusing information with knowledge you can use to generate excess profits. Put simply, if you know something the odds are great that the market also knows it and thus has already incorporated that information into prices. Thus it is too late to act.

  The time to act is when you are designing your investment plan, an asset allocation table. And that should include a large allocation to international stocks. That will provide the diversification benefit you are looking for, diversifying the economic and political risks of US stocks.

  I think that everyone should have at least 30% of their equities in international stocks, with as much as 50%, which is my own allocation.