For everyday people, the impact is real. If you’re traveling to Europe, your hotel and meals just got more expensive. If you’re a business importing goods, your costs have gone up. On the flip side, our exports look cheaper to foreign buyers, which could help American manufacturers. But perhaps the biggest consequence is in investment flows—where global investors decide to put their money.

Right now, more money is flowing out of the U.S. and into international markets. According to JP Morgan, foreign individual investors have been selling U.S. equities in some months, preferring to buy local assets. That’s why European-focused ETFs like VGK (Vanguard European ETF with 1,200+ stocks), EZU (iShares Eurozone ETF with 220 stocks), and EWG (iShares Germany ETF with 53 stocks) are gaining traction. If the dollar continues to weaken, this shift toward international investments could accelerate.

This doesn’t mean international investing is without risk. Emerging economies and local currency bonds often offer higher potential returns, but they also come with more volatility. Still, when the dollar weakens, holding assets in other currencies can be a smart hedge. For example, buying European equities gives you exposure not just to the businesses themselves but also to the Euro, which may gain strength relative to the dollar.

Gold is another area where investors are paying attention. For years, gold was viewed as a hedge, not an investment. It didn’t produce cash flow and usually underperformed stocks over the long term. But in 2025, gold prices have broken record highs, even outpacing the stock market. Why? Because gold can’t be printed, and when governments keep piling on debt and printing money, investors look for something with inherent value. Central banks around the world have been buying gold aggressively since the pandemic, which has helped fuel this trend.

So, what does this mean for your investment strategy? It means diversification matters more than ever. Instead of chasing the latest headlines, I encourage people to think in terms of allocation: maybe part in the S&P 500, part in tech growth, part in income dividends, and yes, a portion in international markets or even gold. The key is not to panic but to build a portfolio that can withstand currency fluctuations, inflation, and market shifts.

A weakening dollar is not the end of the world, but it is a reminder that the U.S. is not the only player in the global economy. Smart investors are looking abroad, balancing risk with opportunity, and making sure their strategy is built for the long term.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.

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