Dollar’s Wobble & The Prudent Investor

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The American dollar, you see, isn’t quite the unshakeable colossus it once pretended to be. It’s lost a bit of its swagger – 11% against the Euro, 9% against the Pound. A trifle, some say. A harbinger, I suggest. The whispers are of a “Sell America” trend, a subtle shifting of fortunes. It’s a bit like watching a portly gentleman attempt a nimble jig – amusing, perhaps, but not entirely reassuring. The world, it seems, is beginning to diversify its affections, and money, as always, follows opportunity. The reasons, naturally, are a tangled web of tariffs, debts, and the occasional threat to the guardians of the vault – the Federal Reserve. A rather untidy affair, really.

This “Sell America” business isn’t a conspiracy, mind you, just a logical consequence of… let’s call it fiscal improvisation. Investors, those discerning creatures, are simply seeking firmer ground. And when the ground beneath America begins to tremble, they look elsewhere. It’s a simple principle, really – like a seasoned gambler moving his chips to a more promising table. The result? A potentially weaker dollar, rising bond yields, and a general air of… uncertainty. A delicious uncertainty, for those of us with a nose for opportunity.

Currencies, of course, are fickle beasts. They dance to a tune only they can hear. But one thing is becoming increasingly clear: the rest of the world isn’t exactly languishing in America’s shadow. The Vanguard Total International Stock Index Fund ETF (VXUS +0.45%) has been performing rather nicely, thank you very much – a 32% gain in the last year. While the S&P 500 and Nasdaq-100 managed a respectable showing, they’ve been left trailing. It’s a bit like watching a tortoise overtake a hare. Unexpected, but undeniably true.

So, why now is a good time to consider international stocks? Because prudence, my friends, is a virtue. And diversification is its handmaiden. Let’s be clear: I’m not suggesting a wholesale abandonment of American enterprise. But to place all your eggs in one basket, even a gilded one, is a recipe for anxiety.

How International Stocks Can Cushion the Fall

Think of international stocks as a sort of financial umbrella. When the dollar takes a tumble, these stocks tend to gain a bit of altitude. It’s simple arithmetic, really. When the dollar weakens, the value of assets denominated in other currencies increases. A European share, purchased for $100 when the exchange rate was favorable, suddenly becomes worth more when the dollar falters. It’s a rather elegant solution, isn’t it? Turning a potential loss into a modest profit.

Why Bother with the Rest of the World?

Some argue that American companies already have enough international exposure. A perfectly reasonable point, but a dangerously complacent one. To assume that owning a few multinational giants absolves you of the need for broader diversification is like believing a single bodyguard can protect an entire city. It’s a comforting illusion, but an illusion nonetheless.

  • Diversify Beyond American Shores. Should the American economy stumble, or its debt spiral out of control, you’ll be glad you have a few assets safely tucked away in other corners of the globe.
  • Rebalance Your Portfolio. If your portfolio has become excessively weighted towards American stocks, it’s time for a bit of corrective surgery. A healthy portfolio, like a well-balanced meal, requires a variety of ingredients.
  • International Stocks Might Be Underpriced. The price-to-earnings ratio on the S&P 500 is currently a rather lofty 31.3, while the Vanguard Total International Stock ETF trades at a more modest 17.8. A bargain, perhaps?

Why This Particular Fund?

The Vanguard Total International Stock ETF (VXUS) gives you exposure to a staggering 8,646 international stocks. Europe, emerging markets, the Pacific, even the Middle East – it’s all there. As of December 31, 2025, its top holdings include:

  • Taiwan Semiconductor Manufacturing – a world leader in the semiconductor industry (2.98% of ETF)
  • Tencent – a Chinese internet and technology company (1.19%)
  • ASML Holding – a Dutch innovator in the semiconductor industry (1.06%)
  • Samsung Electronics – a South Korean conglomerate (0.98%)
  • Alibaba Group – a Chinese e-commerce giant (0.82%)

These aren’t just companies; they’re engines of innovation, drivers of global growth. And you can own a piece of them for a mere 0.05% expense ratio. Whether the rest of the world decides to “sell America” or not, owning international assets is a prudent move. The Vanguard Total International Stock ETF offers a simple, cost-effective way to diversify your savings, reduce your risks, and potentially earn bigger returns. It’s not a guaranteed fortune, of course. But in the world of finance, a little prudence goes a long way.

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2026-01-21 21:03