In my July 7 YouTube video: “Quick Pick UUP” I added the Invesco DB U.S. Dollar Index Bullish Fund (UUP) to my Perfect 5 ETF Portfolio. (To replace the Consumer Staples Select Sector SPDR ETF (XLP) in that portfolio. More on that in another post today.)
Today I’m also going to add this dollar ETF to my Volatility Portfolio and to my Jubak Picks Portfolio. I’m setting a target price of $33.20 in the Jubak Picks Portfolio.
You should take the fact that I’m adding a dollar position to three portfolios as an indication of how strongly I feel about a continued strong dollar.
I laid out the thinking behind that belief in my July 6 YouTube video: Strong Dollar Hits Stocks: 3 Things to Do.
Let me quickly recap here:
The dollar is gaining strength against other global currencies because the Federal Reserve has launched a major cycle of interest rate increases.
The dollar is climbing against the euro and the pound because both the EuroZone and the U.K. economies are slumping.
The dollar is rising against the yuan because China is keeping rates low and pushing cash into the financial system in an effort to stimulate a faltering economy.
The dollar is up against gold and other precious metals because in an inflationary environment those assets lose money.
And, finally, the dollar is up because it looks to be the safest haven in a financial world beset with multiple dangers.
I don’t see this as a long-term play but it should be good for as long as the Federal Reserve is raising interest rates
The Jubak Picks Portfolio lives on this site. The Volatiity and Perfect 5 ETF portfolios live on my subscription JubakAM.com and JugglingWithKnives.com sites
