How U.S. Firms Benefit When The Dollar Falls..

Many investors are programmed to believe that a decline in the value of the U.S. dollar is a bad thing. But what's interesting about a weak dollar is the profit opportunities it presents investors with. A falling dollar diminishes its purchasing power internationally, and that eventually translates to the consumer level. For example, a weak dollar increases the cost to import oil, causing oil prices to rise. This means a dollar buys less gas and that pinches many consumers.

While that scenario is unfortunate, investors can have their revenge, so to speak, by investing in the stocks of U.S. multinational corporations. Oftentimes, these are companies that investors are already familiar with. They are among the biggest companies not only in the States, but in the world, and earn a significant portion of their profits overseas. As more emerging markets acquire a taste for American products, these companies will send more products across the globe, boosting their bottom lines and perhaps shareholder returns.

Winston Dsouza