Here we go again. Thought the dollar had stabilized against the major global currencies? Well guess again. After a strong nine months that saw the greenback run circles against most global currencies (the shekel is an exception), the recent appointment of Janet Yellen as new Federal Reserve head, the dysfunctional US government during the recent shutdown and this past Tuesday’s lousy jobs report, the greenback has started to fall with a renewed vigor.
The market is figuring that there will be no “taper” in the foreseeable future and, as such, sees the US continuing to print money and weaken the currency. This is confirmed by Anthony Mirhaydari, the founder and publisher of The Edge, an investment advisory newsletter. He writes in Marketwatch.com: “And thanks to constant reassurances from Federal Reserve officials, and Tuesday’s weaker-than-expected payroll gains, it doesn’t look like the ongoing $85 billion-a-month quantitative- easing (QE) stimulus is going to be slowed anytime soon. Wall Street increasingly doesn’t expect the much-discussed and much-feared “taper” until sometime in early 2014. And even that depends on Republicans and Democrats coming together by January to forge a long-term budget deal and prevent another shutdown showdown. But the casualty in all this has been the US dollar, which has fallen out of its two-year trading range and now threatens to return to its 2011 lows.”
甚至还有呼吁新兴经济体的领导人，以取代已经下降，美元作为世界储备货币的地位。Once again China called for a new reserve currency to take the place of the dollar.While in practice the dollar still remains the world’s looked-to currency, the apprehension of many world leaders and foreign-exchange traders means that investors should look at ways to protect themselves against the potential for further dollar falls.
As I write about in my recently published book, Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing(McGraw-Hill), the fall in the US dollar is nothing new. While it has been exacerbated recently due to the government printing money, the dollar has been slowly depreciating since the Korean War in the 1950s. With economic growth now global, and as the world gets wealthier, foreign currencies have become much more stable, and the need to hold dollars as a protection of sorts has become almost irrelevant.
Investors need to protect their portfolios against a depreciating currency. The question is how? For individual investors, who neither have the money, the time to trade in currencies, nor the ability to absorb the potential huge losses (currency trading is very speculative), there are some other good options available to diversify away from the dollar.
• Global bond mutual fund: This is a managed portfolio of bonds that are denominated in multiple currencies, such as a basket of currencies (including the Australian dollar, the euro, Swiss franc, etc.). Such portfolios may have little exposure to the US dollar. The advantage of this route is that there is a paid professional who is an expert in currencies and manages the portfolio for you. In addition, since it’s a bond portfolio, you also get monthly interest payments. However, be aware that a fund like this can also lose money and is not guaranteed.
Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, SIFMA. For more information, visit www.sisoftball.com, www.gpsinvestor.com or email firstname.lastname@example.org.