Why Is the U.S. Dollar Declining—and What Does It Mean for Investors? (EP.213)

Jul 16, 2025

Explore the surprising decline of the U.S. dollar and its impact on international equities. Discover how currency fluctuations can significantly affect your investment returns, using a fun lemonade stand analogy. Dive into the economic forces driving the dollar's weakness, from inflation to labor supply issues. Learn why analysts missed the mark on predictions and identify new opportunities for diversifying your portfolio in this changing landscape.

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ANECDOTE

Currency Impact Example

Peter Lazaroff uses the example of investing in a French lemonade company to explain currency impact.
A declining US dollar can boost your returns significantly when converting back from foreign investments.

INSIGHT

Why the Dollar Declined in 2025

Currency values fluctuate due to supply and demand influenced by interest rates and inflation.
Markets misjudged the 2025 dollar drop because tariffs slowed growth instead of spiking inflation.

INSIGHT

Labor's Role in Economic Growth

U.S. economic growth depends on labor supply and productivity growth.
Reduced immigration and retiring baby boomers are shrinking the workforce, causing labor shortages and inflation pressure.

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In this episode, we explore one of 2025’s most surprising financial trends: the significant decline of the U.S. dollar and the remarkable outperformance of international equities. Join host Peter Lazaroff as he breaks down exactly why the dollar weakened, how currency fluctuations directly impact your investment returns, and what this means for your long-term investment strategy.

Listen now and learn:

►Understand how currency movements impact your portfolio

► Learn why analyst predictions about the dollar missed the mark

► Discover the economic trends influencing currency values in 2025

► Identify opportunities to diversify your investment portfolio

Visit www.TheLongTermInvestor.com for show notes, free resources, and a place to submit questions.

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