Sometime early last spring Mungofitch over at Shrewdm lodged some posts suggesting that the dollar was beginning to decline in value and that we as a nation were pursuing policies that would likely contribute to continuation of that decline. One of his posts suggested wip, an inflation adjusted international govt etf, might be a place to put savings as a bet against the dollar (I think). I forgot all about it until I looked at my end of year investment results and notes and saw that wip had substantially outperformed my u.s. savings by about 10% which roughly matched the dollar’s decline last year.
Based upon my belief that the dollar will likely decline again this year, I moved money out of bndx and Vusxx and into wip. The early returns are promising, and will prove to be a better place for my cash if the dollar continues to decline.
Any thoughts pro or con from the denizens of this board?
I am not convinced it will decline MUCH further from here absent a recession. It is basically flat over the last 10 years so the dollar has more or less fallen from the artificially high amount it achieved in 2022. Over the last ten years, it has only been about 7% lower from here and one of those lows happened during Covid.
There was a 10-year period, 2004-2014 where DXY was down in the 80s, but from 2015 to now it has mostly been in the 90s with the higher period you mentioned.
The long term charts favor the dollar. You do not make a long term bet against the dollar unless you think This Time is Different. I think it is, but I can’t prove it.