The Guru Investor

As stocks have surged over the past two-and-a-half months, the dollar has tumbled. And, according to Francois Trahan and ISI Group’s Portfolio Strategy Group, you can reap the benefits of both.

On Barrons.com, Randall W. Forsyth writes that Trahan’s group says investors bullish on U.S. equities should buy stock in big, global companies that may be based outside the States, but compete in the same markets as American firms.

Trahan’s group feels that “if you think that if you’re bullish on U.S. stocks that will benefit from an economic recovery and reflation, why not buy foreign stocks, which should get the added benefit of currency gains from the dollar’s decline?” according to Forsyth.

The ISI group offered several suggestions based on different sectors:

• For energy stocks, look to Canadian firms, which trade mostly in line with U.S. firms but should be boosted by a recovering loonie
• For materials stocks, look to Brazil, especially since China has become its biggest trading partner;
• For industrials, target South Korean firms;
• For metals and mining, key on Australian firms, whose dollar was hit hard in the flight to U.S. dollar quality last year;
• For gold-related stocks, look to South Africa mining firms.

“You can wring your hands and bewail the demise of the dollar,” writes Forsyth. “Or you can take advantage by investing abroad. Never has it been so easy for Americans to do so.”