News Stocks 

U.S. dollar set to face more pain in 2018, so here’s how to prepare, says Wells Fargo

“After a protracted period of weakness, should those investors maintaining a bullish outlook on the U.S. dollar throw in the towel?” writes Anneken Tappe for Diversification is key, says Wells Fargo. “U.S.-dollar-denominated allocations to international developed- and emerging-market equities are two of the simplest -— and most effective — ways to insulate a portfolio from a declining dollar,” the bank’s analyst wrote. “In dollar terms, international [developed market] stocks have consistently outperformed domestic stocks when the dollar depreciates — and vice versa,” Wells Fargo said.Because that downdraft isn’t likely to be halted by Federal Reserve interest-rate hikes, the end of easy-money policies by other central banks, or further fiscal stimulus in the U.S. “Our forecast is for continued dollar depreciation at least for the remainder of 2018.Heavier U.S. government borrowing, a broad-based international economic recovery, and the forthcoming end to the European Central Bank’s accommodative history of past cycles repeats itself, or even rhymes, we may be faced with a weak dollar for years beyond 2018.” What should investors do to guard against a downbeat dollar?.

Share This:

Related posts