Investments that Benefit from a Weak Dollar

There are a number of parts of the economy that can be damaged by a weak dollar. However, there are some investments that actually benefit from a weak dollar. Here are some of the investments that you could put your money into if you want to benefit from a weak dollar.

Forex

One of the most direct ways to benefit from a weak dollar is to invest in the Forex market. The Forex market is all about betting on the relationships between two different currencies. The most commonly traded currency in the world is the United States dollar. Therefore, you can bet directly against the United States dollar in relation to many different currencies. For example, if you decided to buy the EUR/USD pair, you are essentially buying euros and selling dollars. If the value of the euro increases in comparison to the dollar, you are going to make money. You do not necessarily have to invest in the euro as there are many different currencies that can be traded against the dollar. This gives you the most direct way to benefit from fluctuations in the exchange rate of the dollar. This market fluctuates quickly, so you will want to be aware that there is some risk with this approach.

Foreign Mutual Funds

Another type of investment that you could choose to get into is a foreign mutual fund. When you invest in a foreign mutual fund, you are going to be buying partial ownership of all of the assets within the fund. This gives you the ability to invest into foreign economies. By investing in these funds, you can often benefit from the fluctuations in the exchange rate.

Gold

Gold is the most popular type of metal to invest in. Gold is widely known as a good hedge against inflation. Gold is commonly sold in dollars across the world. This means that as the value of the dollar decreases, the value of gold is going to increase in most cases. While it is not always like this, you will generally see this correlation. You can buy gold directly from a precious metals dealer or you can invest in gold mining company stocks.

Exporters

Another way that you can benefit from a weak dollar is to invest in companies that make a good portion of their profits from exporting. Companies that reside in the United States that sell their products overseas can benefit greatly from a weak dollar. When the dollar falls in value, these companies are going to be able to come out ahead when they convert the money that they have earned from sales back into dollars. In addition to that, they could potentially lower their prices because of the smaller value of the dollar. In many cases, the lower prices will increase the sales of the company overseas. By taking this approach, you are going to be able to benefit from the weak dollar while investing in a domestic stock. 

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