I live for these moments.
We are in the middle of a significant macro shift. On the growth side, things keep slowing; however, inflation is set to start accelerating again.
Slowing inflation gave the Federal Reserve confidence to lower rates, which caused the US Dollar to go down in value. The obvious consequence is that this dollar’s price will increase again.
What does this mean for the portfolio?
We will continue to focus on defensive sectors as growth is still slowing, but commodities will be the place to build new positions. The dip in inflation caused a dip in commodity prices, which allows us to buy at more attractive prices.
Who else loves a decrease in the value of the US Dollar?
An obvious beneficiary of this decrease in the strength of the US Dollar is the Emerging Markets.
We have been in India for quite some time with great results, as shown below.
India VS S&P 500
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