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Inflation and US Equities : UKInvesting

I’m sure I’m not the only one that has noticed that whilst 2020 was a good year for stock returns, the actual return of US equities I held were reduced due to the relative weakening of the dollar to the GBP. I only started investing in April 2020, but the stocks I bought then have seen 10% loss on value due to the foreign exchange.

There are mixed views on the impact of the large volume of money printed during the pandemic and how this will impact inflation. Ranging from the Fed denying inflation will occur, to Michael Burrys view on hyperinflation and complete market collapse. Whilst I also do not know what will happen, my assumption is that the USD will likely continue to weaken relative to the GBP – please feel free to disagree below.

On the assumption that the dollar will continue to be devalued, what strategies are people employing to reduce losses due to the Fx? Even many of the etfs on platforms such as vanguard trade using the USD as the base currency.

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