Do you ever notice how some financial TV pundits find a way to talk doom and gloom when things are actually going quite well? Take the US Dollar, which is very strong right now. If you’re not into financial markets, you wouldn’t know that the US Dollar is up more than 25% in the last 2 1/2 years and almost 40% since early 2011. Still, when the Dollar eventually does weaken, we’ll see ‘Dollar Crisis!’ stories popping up across the news media.
So what does that mean to you?
Even at its peak, the US Dollar can still experience several positive years that follow. There’s historical proof of it.
We can point to a couple of recent peaks of the US Dollar within the last three decades – 1985 and 2002 – to see that the immediate 5 years that followed the peak year remained positive.
S&P 500: +20.4%/year from 1985-1989 (5 years)*
Non-US Developed stocks: +36.1%/year from 1985-1990 (5 years)**
S&P 500: +6.2%/year from 2002-2006 (5 years) *
Non US Developed stocks: +15%/year from 2002-2006 (5 years)**
Our goal in illustrating the point enough is not to make a prediction. Rather, we aim to offer some much-needed perspective in the midst of “Run on the Dollar” fear stories that will only continue to swirl.
With this in mind, it may make sense for us to have a conversation about whether or not your portfolio should have or increase the presence of non-US stocks. The same conversation will allow us to examine the level of diversification you have and if the portfolio is sufficiently balanced for your risk tolerance and goals.
Talk to Fiduciary Financial Partners about scheduling this complimentary review at 630.780.1534.
The fear-based stories are only going to keep coming. You could use a dose of financial reality to combat them from someone who always puts your best interests #1.
John Eberle, CFA® is a Financial Advisor & Chief Investment Officer at Fiduciary Financial Partners. For nearly 20 years in the investment management industry, John has helped high net worth individuals plan a future that they and their families can embrace with confidence.
Fiduciary Financial Partners, LLC is a Registered Investment Adviser. This blog is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Fiduciary Financial Partners, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Fiduciary Financial Partners, LLC unless a client service agreement is in place.
Chart: GaveKal Data/Macrobond
Data: * DFA 2015 Matrix Book, page 13
**DFA 2015 Matrix Book, Page 33