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Dr. Steve Sjuggerud: Emerging Markets Are the Big Winners in a Dollar Decline

The dollar is in a major decline. And there’s good reason to expect it will continue. With that in mind, savvy investors should be asking themselves one question… How do I make the most money when the dollar falls?

The dollar is in a major decline. And  there’s good reason to expect it will continue. With that in mind, savvy investors should be asking themselves one question… How do I make the most money when the dollar falls?

The dollar is in a major decline. And as I explained yesterday, there’s good reason to expect it will continue.

With that in mind, savvy investors should be asking themselves one question… How do I make the most money when the dollar falls?

There are plenty of ways to do it… You could buy precious metals like gold and silver. Or you could invest in U.S. stocks.

Both are smart moves. But there’s one area that will likely lead to even bigger gains… emerging markets.

In fact, history shows that buying emerging markets in times like these is the best way to profit from a dollar decline. And it could easily lead to hundreds-of-percent gains.

Let me explain…


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Emerging markets are the global economies that are on the rise, but not yet at the developed level of the U.S. Think about places like China, India, and Brazil, just to name a few.

A falling dollar takes a huge weight off these markets. That’s because emerging market companies often hold a lot of debt in U.S. dollars.

This can make for tough times when the dollar is getting stronger. These businesses get paid in local currency, after all. If that currency is falling and the dollar is rising, it makes paying debts with local money more difficult.

The opposite happens when the dollar declines. It’s almost as if these companies see portions of their debt evaporate. And it makes the underlying business much stronger… and more valuable.

It’s a virtuous cycle that can lead to massive stock market winners. But it doesn’t happen often.

We saw this kind of setup in the late 1980s. The U.S. dollar peaked in February 1985, and then started to fall. It ultimately bottomed in 1991.

Emerging markets performed fantastically during much of the decline. The MSCI Emerging Markets Index rallied more than 150% from 1987 to its peak in 1990. Check it out…

This rally in emerging markets crushed U.S. stocks over the same period… The S&P 500 Index was up just 57%.

That’s the powerful effect a falling dollar can have on emerging market stocks. And it happened again a decade later…

The dollar had been in an uptrend since 1995. Then it peaked in 2002 and fell nearly 40% over the next six years.

Over that time, emerging market stocks went on one of their best runs in history.

Emerging markets soared 500% from October 2002 through their peak in October 2007. Again, that dwarfed the U.S.’s return of 103% over the same period. Take a look at the chart below…

There’s no question… If you know a dollar decline is coming, emerging markets are one of the best places to put money to work. Period.

Right now, that’s the exact situation we’re in.

Thanks to the Fed’s easy-money policies, the dollar is already falling. It’s down double digits since March. And that’s likely the start of a multiyear downtrend.

Emerging markets should be one of the biggest winners as this trend plays out. And I urge you to own them today if you don’t already.

The Best Way To Profit From a Falling Dollar

The Best Way To Profit From a Falling Dollar

There’s another side effect to Powell’s massive monetary stimulus…It’s a bear market that few are paying attention to… but one with huge implications.

There’s another side effect to Powell’s massive monetary stimulus…It’s a bear market that few are paying attention to… but one with huge implications.

By Dr. Steve Sjuggerud


Jerome Powell has one goal in mind as the Federal Reserve chairman… to kickstart our economy at any cost.

I explained what was happening in July. Powell had recently announced plans to pump up to $6 trillion into the U.S. economy.

Now all those dollars floating around are helping companies ride out today’s pandemic. And with record-low interest rates, businesses can take out cheap debt to stay afloat.

I knew that would lead to a massive boom in asset prices. And it has, with stocks soaring from the March lows to new all-time highs.

That trend is playing out exactly as I expected. It’s why I believe the latest pullback will give way to even higher highs. But there’s another side effect to Powell’s massive monetary stimulus…

It’s a bear market that few are paying attention to… but one with huge implications.

Let me explain…


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Pumping more dollars into the system doesn’t just cause asset prices to rise. It also puts pressure on the value of the U.S. dollar.

When you increase the number of dollars available, it means those dollars are worth less. It’s the other side of easy-money policies. And it causes the value of the dollar to fall.

Not surprisingly, that’s exactly what has happened since the Fed started pumping money into the system in March. Take a look…

The chart above shows the U.S. Dollar Index (“DXY”). It’s the value of the dollar versus a basket of other major global currencies. And it’s the easiest way to track the value of the dollar in real time.

You can see that the index peaked above 102 in March. Since then, it has absolutely crashed… falling more than 10%.

That might not seem like much. But major currencies tend to move at a glacial pace. A 10%-plus decline over a couple of years would be news… For it to happen in less than six months is shocking.

This decline likely isn’t over yet, though. Powell put even more pressure on the dollar last month when he gave a speech at the Kansas City Federal Reserve Bank. He made it clear that the easy money is here to stay.

You see, the Federal Reserve has historically targeted 2% inflation. Since we’ve had little inflation for years, Powell’s new plan is to spark inflation above 2%. The Fed wants to overshoot the old target. And it plans to keep inflation above 2% for a while.

All this means the Fed will keep easy-money policies in place… for as long as it takes. And that will put more pressure on the U.S. dollar along the way.

This has already caused a bear market in the dollar… one that few realize is happening. And it’s nearly certain to continue.

As an investor, you have to take advantage of what’s going on. There are plenty of ways to do that… But one of the best ways to profit from a falling dollar is emerging market stocks. Tomorrow, I’ll show you why.

Dr. Steve Sjuggerud: You’ve Got to Own Stocks Now

The Federal Reserve is pumping trillions of dollars into the system. And investors are excited. That’s a recipe for a boom in stock prices. It’s already happening… And if you don’t get on board now, the opportunity will pass you by.

“I’ve seen this specific situation only a few times in my career,” my buddy Jim told me over lunch a few weeks ago. “When I see it, I know it’s time to buy.”

I’ve learned to follow Jim when he gets excited…

It’s worked out well for me in the past. And it turns out, the opportunity he saw recently is far from over.

Let me explain…


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Back in 2011, Jim’s advice helped me make about four times my money on the stock of a small local bank.

The bank had traded for $23 a share in 2007. Then, the real estate bubble burst here in Florida. The local bank’s stock crashed to around $2 a share. It was priced like it was doomed, but I believed it would survive. Still, I wanted an expert opinion.

So I took Jim out to lunch one day in 2011. He actually had a hand in starting this local bank, but he was no longer an insider. He gave me the key I needed… He said, “Steve, look at the bank’s non-interest income,” and he left it at that.

I dug deeper there. What I saw was that the bank would be completely fine. It was priced as if it was going out of business… However, thanks to its non-interest income, it would weather the real estate storm. So I started buying all I could.

That one sentence from Jim helped me make about four times my money on the stock by the time I sold in 2015.

That 2011 lunch was the first time I asked Jim for his opinion on a bank stock. (Thank you, Jim!) But it wasn’t the last.


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I have known Jim for decades. Our kids grew up together. In his career, he has built a number of small banks from scratch in fast-growing markets, brought in a ton of customers, and then sold those banks to the bigger banks.

The second time I relied on Jim to help me make money in bank stocks, I bought into one of his bank startups. It was later sold to a publicly traded bank, and I made a solid profit. (I don’t remember how much exactly, but I think it was nearly a double.)

In our recent conversation, Jim told me at lunch that he started buying bank stocks in March – after the yield on Treasury bonds crashed.

He nailed it… And it’s not just bank stocks. As you know, stocks in general have soared since then – up 50% from their March bottom. Take a look…

Now, most folks look at this chart and think they missed the rally. I see exactly the opposite…

Sure, I hope that you bought in March, like Jim did. But don’t worry if you didn’t.

The trend is in our favor. The Federal Reserve is pumping trillions of dollars into the system. And investors are excited.

That’s a recipe for a boom in stock prices. It’s already happening… And if you don’t get on board now, the opportunity will pass you by.

It’s not easy to take advantage of a situation like this. And it took even more guts for Jim to buy back in March. But when you look at the body of evidence, it’s clear that stocks are the best investment you can make right now. Take advantage of it.

We Are at New Highs in Stocks But Significantly Higher Prices Are Ahead

The interest-rate story is what makes stocks cheaper than you can imagine… The fact is that this interest-rate story is creating big value for stocks. It’s happening despite the rally we’ve already seen since March. And that’s not the only reason to get excited.

By Dr. Steve Sjuggerud

When it comes to today’s market… interest rates are what matter.

Heck, they’re practically the only thing that matters, as I explained yesterday here.

In that piece, I showed why today’s low interest rates are creating incredible value in the housing market. Today, I’ll focus on stocks.

The fact is that this interest-rate story is creating big value for stocks, too. It’s happening despite the rally we’ve already seen since March. And that’s not the only reason to get excited.

Let me explain…


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The interest-rate story is what makes real estate cheaper than you can imagine… And the same is true for the stock market.

Think about it: You earn about 0% with your money in the bank. But stocks at a price-to-earnings (P/E) ratio of 20 (20-to-1) have an “earnings yield” (E/P) ratio of 5% (that’s 1-to-20).

When you buy a stock at a P/E of 20, you are buying an earnings yield of 5%. Compare that to earning 0% in the bank… or 0.6% on a 10-year bond.

So as you can see, the earnings yield is a way to measure value while keeping interest rates in mind. And it shows that stocks are a great value right now.

Even if stocks doubled in price to a P/E of 40, then their earnings yield would be 2.5% – which is still pretty good relative to other investments these days.

Again, if you’ve been reading DailyWealth recently, you already know this. But there’s even more to the story.

Regular readers know I like to buy what’s cheap, hated, and in an uptrend…

The earnings yield shows us that stocks are not expensive, thanks to interest rates. You can also see that stocks are in an uptrend – you don’t need any fancy charts from me to know that.

But are stocks hated?

You’ve probably noticed that investors are talking more about the stock market this year. The ups and downs have gotten people’s attention. And heck, there are no sporting events to bet on… Might as well bet on stocks, right?

It might feel like more people are buying in, which is an essential part of a Melt Up in stocks. But the data tells me that we are simply not there yet.

A Melt Up is the last big push of a major stock boom, where you tend to see the biggest gains. Stocks are loved in the later stages of a Melt Up… Investors start buying up stocks and stock funds to a crazy degree.

But that isn’t happening yet.

This simple chart sums it up. Since 2017, investors have been consistently pulling money out of American stock funds (exchange-traded and mutual funds). And they have been consistently putting money into bond funds (which pay next to nothing!).

Take a look. More than $800 billion has flowed into bond funds since 2017…

So is this a sign of the end? With the huge rise in stock prices this year, did you miss it?

No, and no.

There’s plenty of upside ahead. So be bold, and take advantage of it!

Most other folks are too hung up on the new highs in stock prices. They’re not willing to accept that stocks are a good deal relative to bonds or money in the bank. But they are a good deal today – thanks to record-low interest rates. And as the chart above shows, they’re hated, too.


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I hope that you are bold enough to see these new highs for what they are. New highs in price mean nothing… What truly matters is what you get for your money – which is a lot today.

Yes, we are at new highs in stocks. And yes – significantly higher prices are ahead.

Investments Are Cheaper Than You Can Imagine Right Now

There’s so much investing opportunity today. I’ll cover it all today. And hopefully you’ll walk away feeling like I do – excited.

By Dr. Steve Sjuggerud

My friend, many investments are cheaper than you can imagine right now…

There’s so much investing opportunity today, I hardly know where to begin!

“Steve, have you lost your mind?” you might be thinking. “You know that we’re in a pandemic… that stock prices are at new all-time highs… and that house prices are now above their 2006 peak… right? So how can you possibly say that these investments are cheap?!”

You’re asking the right questions, of course…

How can houses be cheap when they are selling at all-time highs? I realize it sounds like a ridiculous thing to say. And how can stocks be cheap when they’re almost back to their highs, too?

I’ll cover it all today. And hopefully you’ll walk away feeling like I do… darn excited.


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Click here to watch their presentation


I’ve told this story before. But I keep telling it because, honestly, I know a lot of folks have a hard time believing me.

If that’s you, then please hear me out today. Because this is darn important for us going forward.

If you buy into what I’m talking about, then you will have a huge advantage over your peers in your investments…

You will have conviction that you are doing the right thing… And best of all, chances are great that you will make a heck of a lot more money than just about anyone you know.

There’s a crucial detail that tells us that investments are darn cheap today: interest rates.

We have record-low interest rates, which benefits companies (and their stock prices). And we have record-low mortgage rates, which benefits the housing market.

Let’s stick with the housing idea for today…

The truth is that most people don’t buy a house based on its sticker price… They buy it based on its monthly payment.

So I built a revealing chart. And it’s one you likely haven’t seen before. It’s based on the simple idea that mortgage payments are critical in determining the “fair value” of the median house in America.

Three things are included in my fair-value calculation (all adjusted for inflation):

  1. The median house price in America.
  2. The median income in America.
  3. Mortgage rates.

The result is fascinating…

In the 1980s, when mortgage rates were sky-high, houses were expensive based on my chart.

After that, interest rates went down, and by the 1990s, housing was fairly priced. Then the housing boom took hold, and by 2006, house prices were overvalued.

But the most fascinating part of all of this is what’s happening today. Take a look…

You can see from the black line that house prices bottomed in 2011. That makes sense. Home prices had been crashing for years at that time. And since then, they’ve soared again.

That boom in house prices is what has people worried about real estate now. House prices have gone up so much, people think they can’t go up much further.

But look at my “fair value” line today, in blue above…

Thanks to record-low mortgage rates, the fair value of houses in America today has actually gone up faster than house prices have gone upThe typical home in America is underpriced by about $75,000!


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You’ve heard me say for years that the largest part of my financial portfolio is in Florida real estate. Now you see why. I’m putting my money where my mouth is on this trade.

Higher interest rates would, of course, make houses less of a “value.” But we are not there yet. And with the COVID-19 recession, higher interest rates are still a long way off.

As I said recently, the Fed is going to do all it can to stimulate the economy, with the tools it has always relied on – and that means we are in for lower rates for a long period of time.

That’s it, my friend. That’s the thing that matters most in the market today.

We have record-low interest rates. And that makes housing a better deal than you can imagine. So if you’re in the market to buy a home, don’t put it off… You want to act now.