|
Getting your Trinity Audio player ready...
|
The Fed hits ‘pause’ on rate hikes. Is it time to focus on new strategies for your dollar portfolio and tech investments?
On Wednesday, the Federal Open Market Committee (FOMC) decided to keep U.S. interest rates unchanged at 5-5.25%, breaking the 15-month streak of rate increases. Despite the Federal Reserve’s focus on handling high inflation, this situation hints at a potential dip in the value of the U.S. dollar, impacting investors and those holding dollars.
For clients holding investments in dollars or dollar-pegged currencies, several strategies could be considered to mitigate potential losses due to currency depreciation:
- Diversifying Currency Portfolio: Consider broadening your investments into other stable currencies, such as the Pound or Euro, to offset losses from a depreciating dollar potentially.
- Planning for Retirement Abroad: If you’re considering retirement outside the U.S., it might be prudent to invest in your future residence’s currency to safeguard against future currency fluctuations.
- Investing in Dollar-Hedged Assets: Investments that are hedged against the dollar can provide a protective layer against significant dollar depreciation, adding a level of security to your portfolio.
This shift in monetary policy also bodes well for stock markets, especially technology stocks, by making borrowing cheaper and fostering business growth and consumer spending. It’s a scenario that could boost corporate profits and investor confidence, potentially benefiting deVere clients through rallying technology markets and private investment banking notes.
As ever, we urge you to work with your financial advisor to help protect you from currency volatility and ensure your money is working efficiently.
