As Dollar Strengthens, U.S. Students in Europe Feel the Benefits
A couple of weeks ago, I posted about the potential for the dollar to strengthen in the long term, potentially spurring a flight into the greenback for U.S. investors. It’s not a guarantee, but it’s certainly worth a couple of weeks of serious discussion.
As the dollar continues to improve against the euro, the euro’s relative weakness becomes increasingly worrisome to investors.
But that’s not what worries me right now. In fact, it’s not a matter of “worries” so much as “concerns.”
A currency is just a good investment when investors perceive its value as improving. If the “value” of the currency is weakening, then so are its purchasing power and its potential to attract investors.
Now, I understand that most investors are well-intended and they want U.S. stocks to outperform. But the truth is, many of these investors are reacting to short-sighted concerns.
Here’s another reality: The U.S. economy is improving.
The housing market, for example — which you’d think would be the leading indicator of the strength of the economy — is actually going gangbusters.
Home values in the top 100 metro areas in terms of overall wealth are now at an all-time high, according to Case-Shiller, the data firm that compiles that type of data. That, in itself, tells you that home values and overall wealth are improving.
The home values that Case-Shiller is measuring are both home-owned and owner-occupied. They are the total value of homes for sale, not rental values just for sale. And yes, home values have been rising in the past few months.
Case-Shiller, in fact, said on Wednesday that home values in the nation’s top 100 metro areas improved by 4.8% from