A strong US dollar may make you feel all patriotic inside. But it isn’t just sunny skies and American flags. Here’s what a strong dollar actually means for your wallet.
It might be a good time go OOO. A strong dollar means your money goes further compared to other currencies. So you get more bang for your buck when you check another country off your ‘been there’ list. We’ve heard Paris is nice this time of year.
You may spend less on some big-ticket and everyday items. A strong dollar can also drive down the price of imported goods when the value of the manufacturer’s currency drops. That means you could pay less for everything from fancy foreign cars (hi, BMW) to clothes with Made-in-China tags.
Your investments could make some moves. US companies that do a lot of business overseas may face tougher competition in markets with weaker currencies. Think: big players like McDonald’s, 3M, and Procter & Gamble...you know, ones that mean a lot to the overall health of the US stock market. And are big components of important indexes like the S&P 500. If you own stock in a global company or invest in index funds, your money could be along for the ride.
theSkimm: The US dollar has been riding high lately. Meaning your money goes further in other countries and when you’re buying imported goods at home. That’s a good thing. But it can also cause trouble for American companies that make big money in other countries. Not so good. Add that to the list of reasons it's smart to diversify your investment portfolio. That way, when some of your investments are down, others can hold you up.
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