USD sees worst start in 50 years thanks in part to Trump's tariffs — but for investors it's not all bad news

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4 days ago

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The USD has dropped 10% over the last six months alone, according to the U.S. Dollar Index. This means the dollar has reached its lowest value since the Nixon years, when the price of gold was unlinked from the USD in 1973, creating a rapid decline in the dollar's value.
This decline is being felt most by Americans traveling abroad. Since the dollar has dropped 13% against the euro and 6% against the Japanese yen, international travellers are experiencing the pain of an increased summer vacation budget when visiting trendy destinations like Tokyo, Rome, Paris and Barcelona.
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This time around, the sudden drop is happening partly due to President Donald Trump's recurring tariff threats creating an isolationist foreign policy, according to the New York Times.
With Trump's recently passed 'big, beautiful bill' set to increase the debt by $3.4 trillion, according to the Congressional Budget Office, inflation worries and rising government debt are also pushing the value of the dollar down further.
So what does this mean for your investments?
Here are four ways to protect your retirement fund when the USD takes a nosedive.
Let gold work its magic
Since the value of gold is no longer tied to any particular country or currency, it can be a great way to hedge against a dropping dollar.
A recent report from JPMorgan notes that the current share of gold in foreign exchange (FX) reserves is 'more than double the 4% seen a decade ago,' which highlights the current bull market gold is experiencing.
With prices forecast to climb toward $4,000 per ounce by mid-2026, these gold highs don't appear to be going away anytime soon. This means a percentage of assets in gold could be a solid strategy for growing your investments while the dollar is down.
If you want to get some tax advantages while you're at it, one option is opening a gold IRA with the help of Priority Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the protective benefits of investing in gold. This can make them a good option if you're seeking to shield your retirement funds against a declining dollar.
When you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in precious metals for free.
Read more: Rich, young Americans are ditching the stormy stock market —
Invest in the housing market
Real estate provides another solid option for diversifying your portfolio against market shocks.
'A weaker dollar makes U.S. real estate more attractive to foreign investors as their purchasing power increases,' noted Private Banker International during a previous dollar dip in 2023.
A decrease in the dollar's purchasing power typically leads to rising inflation. While this isn't great for your pocketbook, inflation leads to real estate prices rising due to the increased cost of materials.
This means rental income tends to increase, giving landlords a revenue stream that adjusts with inflation.
But, if you don't want to be a landlord, there are other options for tapping into real estate as an alternative asset. One opportunity is the $34.9 trillion home equity market.
Homeshares allows accredited investors who don't want the headache of buying, owning or managing property the ability to invest in hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund.
With a $25,000 initial investment, Homeshares can provide an effective, hands-off way to invest in high-quality residential properties minus the stress of being a landlord.
And if you're curious about short-term rental investing, but don't want the hassle of being a host, there's an easier option.
Arrived offers access to shares of SEC-qualified investments in rental homes and vacation rentals, vetted for their appreciation and income potential. Backed by world class investors like Jeff Bezos, Arrived makes it easy to add real estate to your portfolio to protect yourself against market swings.
Even better, you can get in the door with a $100 initial investment to see if Arrived is a good fit for you.
Consider adding fine art to your portfolio
Fine art investing can help set your portfolio up for success even when the dollar is low.
Fine art is known for appreciating significantly over time. Contemporary art returns outpaced the S&P 500 by 43% from 1995 to 2024, and the total estimated global value of wealth held in art is $2.1 trillion, according to Deloitte.
But the process of finding and investing in fine art can feel opaque and overwhelming.
If you're not sure how to get started, Masterworks provides a simple way to bring beloved, time-tested artwork into your portfolio through the power of crowd funding.
Masterworks helps you quickly tap into this asset class. All you have to do is invest in fractional shares of artwork from the likes of Picasso and Banksy.
Masterworks then takes care of finding, purchasing and storing the artwork for you, making it a simple hands-off process. Then, when Masterworks sells the painting, you earn a profit.
From 23 exits so far, Masterworks investors have realized representative annualized net returns like +17.6%, +17.8%, and +21.5% among assets held for longer than a year.
If you're looking for a new alternative investment, see if you qualify for Masterworks today. Billionaires like Jeff Bezos and Oprah Winfrey invest in fine art. Why not you?
See important Regulation A disclosures at Masterworks.com/cd.
Make sure to include some international investments
When trust is lost in the dollar, investors often move away from U.S. stocks.
'Investors tend to invest in places where their capital is treated best,' Kristian Kerr, head of macro strategy for LPL Financial, told Investor's Business Daily. 'So, if U.S. assets start to underperform, it's likely investors will move some assets to parts of the world where they can generate better returns.'
While international investments should always make up some percentage of a well-diversified portfolio, now is a good time to look at the balance you have set up between U.S. and international markets.
Kerr added that some foreign investors are now 'rebalancing' their portfolio due to an 'overweight' in U.S. assets. Carrying a healthy mix of international assets can protect you when the dollar is low.
But if you're not sure which international investments to add to your portfolio, you might benefit from an advisor's advice.
Advisor.com can match you with an advisor who can help find the right portfolio mix for you. Since the platform's advisors are legally obligated to act in your best interest, you know your money is in good hands.
How it works is simple — answer a few questions about yourself and your goals and Advisor.com will match you with a vetted financial advisor.
Book a free, no-obligation call today to see if they're the right fit for you.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.