Traders and analysts agree — the dollar is on a wrecking-ball streak across global markets. Whenever there are soaring inflation and aggressive interest rate hikes by the Fed, the value of the dollar swells. A strong dollar is a boon for some, and a crippling reality for others — here's how you can take advantage.
Go Abroad and Shop 'Til You Drop
With a strong dollar, it's a perfect time for Americans to go traveling abroad. Europe and Asia are on sale as tourism destinations, along with all those Gucci accessories or Italian sports cars. The exchange rate throughout the world means you're getting 15% or so more value out of foreign ATM withdrawals (or any currency conversion), and foreign goods are cheaper than they've been in decades. If your job allows you to work remotely, this might be the perfect opportunity to try out the digital nomad life. Earning in dollars abroad translates to a lower cost of living, as foreign countries' local prices aren't as affected by changes in the U.S. economy.
Restructure Your Portfolio With Domestic Stocks
A strong dollar is a challenge for multinationals that do most of their business abroad and receive revenue in currencies that are weak compared to the dollar. Stocks have been on a roller coaster ride, but paying close attention to this factor alone can help you steer clear of further pitfalls. According to Goldman Sachs, Silicon Valley giants like Oracle and Apple receive up to 60% of their revenues abroad. With the dollar on a historic rise, you should consider shifting your portfolio to companies that do business in the U.S. Domestic Airlines like Frontier or Southwest are a safe bet, as are retailers like Whole Foods, which derives 95% of its business from the U.S.