Alon Ozer Discusses How to Invest with a Weakening U.S. Dollar in U.S. News & World Report
The U.S. dollar’s year-to-date return is slightly weaker against a basket of other currencies– and this weakness demonstrates few signs of stalling in 2019. However, if investors diversify their portfolios correctly, they may be able to take advantage of the softening dollar.
To help better understand how investors can profit from a weakening dollar, U.S. News & World Report recently spoke with Omnia Family Wealth Chief Investment Officer Alon Ozer. In the article, Ozer discusses two types of investments to consider as the dollar weakens: gold and broad-based commodity ETFs.
According to Ozer, gold is a traditional hedge against a weak dollar and heightening inflation. This is due to gold being denominated in U.S. dollars, which means its price rises whenever the dollar falls. Furthermore, due to the time it takes to mine and refine gold, supply typically remains consistent.
“Supply and demand is not going to change just because the currency changes, so the price has to adjust,” explains Ozer.
Another investment Ozer says to consider as the dollar continues to weaken are broad-based commodity ETFs, which help investors avoid the volatility of holding a single commodity. Broad-based commodities consist of a conglomerate of natural resources, such as precious metals like gold and silver, industrial metals like copper, energy, and agricultural markets. Investors should be aware, however, that investing in commodity ETFs may be pricier than standard ETFs with a average cost of .92 percent.
In addition to gold and broad-based commodity ETFs, investors may also consider looking into the Treasury’s inflation-protected securities, U.S. multinational companies, crude oil, sovereign debt, international corporate debt, and emerging market equities as the dollar weakens.