>What to expect from a rising dollar

>One of the biggest developments over the course of last week was the rising US dollar. Many investors view changes in the overall direction of the US Dollar with passing interest as they falsely assume they are not directly invested in its outcome.
The demise of the euro and the problems that abound for the Euro Zone, and namely Greece, Portugal and Spain, have caused confusion and over reaction by investors to the foreign currencies. Most investors will trade on this fear; selling without the true realization of what the fear means.
In the last 24 years, there have been 10 rising dollar markets and 10 falling dollar markets. Interestingly, the duration of each of these conditions has averaged about 450 days ( 458 day average for falling markets vs. 433 day average for rising periods) and resulted in moves of about plus/minus -20% in each direction. The S&P was helped greatly in the last “falling dollar market”, as it posted huge market returns since the March 2009 low. Generally speaking, in a “rising dollar market”, Small Cap US stocks, Mid Cap US stocks, and Growth stocks tend to do quite well. On the other hand, strong asset classes during falling dollar periods include Non-Us Equity and Commodity indices, as well as Gold.
This is why you need a well diversified portfolio with a disciplined rebalancing regime. Market timing does not work. No one can predict what areas will suffer or prosper. Our goal is to objectively identify assets classes based on academically oriented studies and then adjust the risk to meet your personal profile and objectives.

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