Protect Yourself From The Dollar Drop

Money:

Question: I know I can protect my portfolio against inflation by investing in TIPs and against market volatility by diversifying my investments. But how can I hedge against adverse U.S. dollar movements? - Brian Canes, Scarsdale, N.Y.

Answer: It's not surprising that, like you, many investors are looking to insulate themselves from fallout from the declining buck or even profit from its slide.

After all, the dollar - which recently slumped to an all-time low of $1.48 vs. the Euro - has been commanding less respect lately than the late comedian Rodney Dangerfield used to get. There's been talk that central banks may begin diversifying at least part of their currency reserves into Euros, while some oil-rich Persian Gulf countries are considering no longer pegging their currencies to the dollar.

Read the whole story: Money

Comments

[l.blissett]

08:54 AM on 12/06/2007

here's another option to consider:

develop your own community currency--
http://www.strike-the-root.com/3/pre/pre2.html

[loki]

12:52 AM on 12/06/2007

http://www.321energy.com/editorials/kunstler/kunstler112707.html

[loki]

11:40 PM on 12/05/2007

http://www.garrettsocling.com/2007/07/15/the-united-states-a-pile-of-cards/

[loki]

10:44 PM on 12/05/2007

Wow according to an article from Kiplingers, Cheney doesnt like US investments. Talk about whos patriotic.

""The Cheneys also had between $10 million and $25 million in American Century International Bond. The fund buys mainly high-quality foreign bonds (predominantly in Europe) and rarely hedges against possible increases in the value of the dollar. Indeed, its prospectus limits dollar exposure to 25% of assets and the fund currently has only 6% of assets in dollars, according to an American Century spokesman.""

[loki]

10:28 PM on 12/05/2007

7 Countries Considering Abandoning the US Dollar (and what it means)

http://www.liveleak.com/view?i=21b_1194782832

I know most of the mega wealthy can move their money all around and convert it without paying hefty fees, fines and taxes, but what can the rest of us do ? If things keep going the way it appears to be going, well, remember those photos from after WWII when the German Mark was worthless and people had wheelbarrows full of Marks just to buy a loaf of bread?? Maybe not that bad, for a while, but its not getting better. Of course the wealthy usually get bailed out by tax payer money or special allowances that apply only to them. But what about the bulk of the US citizens? I guess we are on our own while the capitalist who created this mess just move off to other countries to do it there.

heres an interesting story. Jim Rogers, chairman of Beeland Interests Inc. and Ex George Soros partner, said he is shifting all his assets out of the dollar and buying Chinese and moving to Shenghai.

George Soros is selling off dollars saying they are losing proposition.

Warren Buffet - selling dollars

A lot of the mega wealthy, selling the dollar.

Get the picture.. the Rats are jumping ship, letting the public to drown on their own.

These are the people a lot of Republicans, and a fair share of democrats too, hold up high on a pedestal as gods , just because they have a lot of money.

[fourex]

09:34 PM on 12/05/2007

Protect Yourself From Dollar Drop,
Demand payment in Euros.

[getoffmedz]

12:31 PM on 12/05/2007

Working class Americans have no where to run and no where to hide from the Bush/Cheney economy.

And y'all voted for them, TWICE!

The dollar is slide is the world voting NO CONFIDENCE in our once great country.

[WMG]

11:39 AM on 12/05/2007

In your premise, you suggest TIPS are a no brainer. Not so, IMO. They're based on CPI, and its computation has been tortured thru hedonic adjustments, changes to the basket of goods, etc., so much so that it underestimates inflation. I allocate only 5% to TIPS, and suspect that has been too much.

The advise on Gold, foreign currencies, and foreign funds is good. Google "dow to gold ratio" and find a chart dating to 1900. It may change your investment life forever. It shows how extreme the respective values have traded, and IMO show staggering upside for gold. Also provides a framework for deciding when to move into and out of gold. Read Jim Jubak on msn--best mainstream guy out there. Read Minyanville--amazingly useful site. Read Peter Schiff on the dollar and foreign investments. Read Financial Sense. Read Jsmineset on gold, but beware, the commentary is sometimes rough around the edges.

Good luck. We all need it.

[wadenelson1]

11:31 AM on 12/05/2007

A former commodities broker answers:

Buy some options in foreign currencies or metals. Or perhaps oil.

Stay away from the futures themselves, too much leverage,too much risk.

Just 10%, 15% of your portfolio, to "hedge" those items that WILL decline if the dollar goes down.

If options scare you too bad, gold stocks are another option.

These days you can probably buy stock directly in European or Asian firms. They'll at least hold their value as the dollar goes down. I'm sure there are mutual funds made up of foregin stocks as well.

Simply buying Krugerrands (gold bullion) and putting it under the bed is the final option. Least safe, least desireable, highest fees to buy and sell, but...