The Weakening US Dollar

For anyone who listened to my radio show this morning, this blog post reinforces my concern about the massive, debt driven stimulus spending in the US. This thought provoking article from the Financial Post paints a bleak picture, but it is pretty hard to argue with any of the concerns raised by author Edward Hadas.

As I have frequently noted, this may make it tough to invest in US equities over the long term. The Dow is essentially flat over the last decade, so an American invested in her native market has essentially broken even, but the massive revaluation of the US currency leaves a Canadian with a loss of over thirty percent on a currency adjusted basis.

This may not preclude investing in the US market, but it sure makes sense to consider hedging your US denominated positions.

This is for information purposes only. Views expressed are those of the author, not Scotia Capital.