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If you want to “escape” the plummeting U.S. dollar, you have to travel to a banking haven like Switzerland… or own foreign real estate, right?
All you need is an Internet connection and a regular brokerage account… and you’re ready to participate in one of the easiest, safest ways to diversify a portion of your wealth out of the depreciating dollar… and into safe, income-producing assets. As I’ll show you in a moment, this strategy is bringing in cash for many readers…
Once again, here it is:
For folks worried about diversifying their assets out of U.S. dollars, one of the greatest ideas in the world is to own America’s best dividend-paying companies that earn a big chunk of their profits in foreign currencies.
It doesn’t matter what currency the company is making profits in – Russian rubles, Swiss francs, Chinese yuan, Indian rupees, euros, and all kinds of other currencies work just fine. U.S. multinational companies earn their profits in foreign currencies and then convert them into annual dividends.
Owning big U.S. blue-chip multinationals gets you exposure to rapidly growing emerging markets… and still gives you plenty of “sleep at night” peace of mind that your investment is in a stable company with a long track record of performance… operating under a developed legal system that protects property rights… and subject to reasonable regulations.
My favorite example of this idea continues to be the quintessential American brand: Coca-Cola (KO).
You know Coke is the No. 1 beverage company in America. But what you probably don’t know is, Coke sells the No. 1 soda in China: Sprite. Sprite is the No. 2 sparkling beverage in India. While the per-capita consumption in both countries is 15% of what it is in the U.S., most beverage experts believe consumption will grow faster in the Asian nations. Coke sells nearly 3,300 beverage products worldwide… and gets most of its revenues (77%) from outside North America.
Coke has used its “all over the world and in all major currencies” business model to pay $11.4 billion in cash dividends to shareholders and purchase $2.6 billion in stock over the past three years. Currently, the stock yields just under 3%, and the company is sitting on an $11 billion hoard of cash. I wouldn’t be surprised to see it increase dividends or buybacks.
Big blue-chip multinationals have the ability to pass increased input prices on to consumers. Plus, they offer dividend yields in the 3%-5% range… so I see them as great inflation hedges as well (even better than gold). We’re not seeing any inflation at the moment, but if you’re worried it’s coming, these companies are a great place to park some of your wealth.
With the dollar striking new multi-year lows almost daily… with folks worried sick over inflation… and with income one of the most important factors in the success of your overall portfolio, this idea has never been more important.
Here’s to our health, wealth, and a great retirement,
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