How to invest in Asia when US dollar (USD) is down 10% YTD?
The US Dollar has devalued by 10% in 2025 (YTD).
Image from barchart - USD fell 10% in value in 2025 YTD
It can take months or years before the market enters a correction. It can also happen in a moment. A market top cannot conceal some of the market weaknesses in debt and demand. Consider building a portfolio that benefits from a bull, bear or baboon run.
Inputs from Grok:
Market corrections are unpredictable, as evidence suggests they can strike suddenly or develop slowly due to factors like tariffs or recessions, with 2025 forecasts ranging from 10-16% drops. Hidden weaknesses, such as high debt or weak demand, often lurk at market peaks, as seen in past crises like 2008. Diversifying portfolios across asset classes and regions is a solid strategy to navigate bull, bear, or volatile markets, though it’s not foolproof. Let us be sceptical of overemphasising market timing—long-term investing often outperforms, as markets historically recover. Focus on resilience, not prediction.
To hedge a 10% USD devaluation, non-USA investors with SGD and HKD assets can use currency forwards to lock in rates, invest in non-USD assets like European stocks, or diversify into gold or SGD-based ETFs. HKD's USD peg means it weakens too, while SGD may strengthen, affecting returns. A 16% margin may cover the 10% loss and 1-2% trading fees, but effective hedging could lower this need to 11-12%. Costs vary by broker, and further devaluation is possible. Consult a financial advisor for tailored strategies.
My investing muse
Some have said that it is about time in the market, not timing the marketing. There needs to be some criteria that the business has - a track record of revenue and profits growth, competitive advantages, strong free cash flow and a strong management team. We need to do more in-depth qualifications before investing.
Given the climate and restraint shown by institutions, I preferred to monitor the market from the sidelines. The market is hitting peak with overvaluation. There is still money to be made in the current market, and let us take up positions with an adequate margin of safety. Wishing all success.
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