Chris Lau - Seeking Alpha

Thursday, September 04, 2008

How to Profit from a Stronger US Dollar

The US Dollar's strength over the past two months has held strong. This is due to the market realizing that the US is not the only country facing slower growth. Worse is that Europe, India, and China are also facing even slower growth than that of the U.S. (from a growth deceleration perspective).


To profit from the inflow of foreign investors into the U.S., investors should be long on the US 20-year treasury bill. Boring yes, but profitable as well.
Chart Source: http://stockcharts.com/charts/gallery.html?$TLT

While the most recent rally might be at risk of pulling back, investors should consider entering TLT on a close above $96.

Note: Credit should be given to Iain Fraser for recommending TLT several months ago on DV tech talk.