America has become a refuge for those seeking safety & opportunity. This is also applicable for foreign investors' capital. In today's economy, a strong dollar can present both benefits and challenges for U.S. investors.

A strong dollar occurs when the U.S. dollar (USD) can purchase more of a foreign currency than normal, generally measured by a historical range. Typically, during these times the United States is seen as a safe haven for capital, given the stability of its monetary system and economic growth potential.   When the USD can purchase more of that currency, imports become more affordable.  The downside is that exports also become more expensive.

There are also other risks, especially with conditions such as:

• unemployment & underemployment still above historical norms, leading to muted consumer spending;
• fewer exports, which certainly would affect large, multi-national corporations such as those found in the Dow Jones Industrial Average or the S&P 500;
• tight lending markets, as  banks are still adjusting capital reserves because of the financial crisis & subsequent regulations;
  
• foreign economies that are currently somewhat fragile, as central banks are pumping money into circulation (remember "quantitative easing?").

Another concern that Jack Lew, U.S. Secretary of the Treasury, will have is that as the USD becomes stronger, it will reduce US exports even further, which could hurt the bottom line and pace of hiring, resulting in slowing an already sluggish economy.  We'll need to watch how this catch-22 plays out, as weakening the dollar could help exports (corporations)  and the expense of imports (consumers), while strengthening the dollar would have the reverse effect.In the meantime, it may be worth reviewing your portfolio to determine how sensitive your investments are to these risks.  For a complimentary review, you can contact Locker Wealth Management at 708-960-0520, or by visiting the " Contact " section of our website .