Our Bold Prediction About The Dollar For 2023… And How To Profit

Want to discover some of the most potentially lucrative (perhaps even eccentric) investment opportunities in the world?

Who doesn’t?

When we release our annual predictions report, our entire goal over at Capital Wealth Letter is to uncover select opportunities that could become life-changing investments. But as you can imagine, if you want to identify a groundbreaking idea, you have to be forward thinking… and willing to go out on a limb.

We’ve been doing this for years now, alerting investors to the market’s most pressing dangers and profitable opportunities. That’s because we think investors want clear, unhedged, and accurate forecasts… and we are determined to provide them for all to see.

As it turns out, investors have enjoyed reading our reports. Because everyone wants to get a handle on the future. So when readers saw that our analyses made good sense, and a good many (though certainly not all) of our forecasts came true.

The Only Constant Is Change

Just think of how much the world has changed… Did you honestly believe when you were younger that most of us would soon have tiny computers in our pockets or purse at nearly every waking moment? And those devices could access virtually all of the world’s knowledge?

Early investors in Apple (Nasdaq: AAPL) came out alright on that game-changer.

Remember Blockbuster? Just 15 years ago, it was a household name. But it’s now consigned to the dustbin of history, alongside other relics like dial-up internet and VHS tapes. It was usurped by a tiny upstart called Netflix (Nasdaq: NFLX) — another company that’s made shareholders a windfall.

This year’s report describes specific investment opportunities which can help you reap exceptional profits. We can’t promise we’ll get every prediction right — but each one of them could deliver substantial profits.

And today, I’d like to share one of our predictions with you…

Prediction #1: Emerging Markets Will Soar In 2023… Thanks To A Weakened U.S. Dollar

Last year we (correctly) predicted that we would be hit with hyperinflation, which would cause a major stock market selloff as the Federal Reserve turned off the printing presses and tightened its belt.

Sure enough, inflation soared to its highest levels in 40 years, and the S&P 500 plunged over 20%, with the Nasdaq falling even deeper into bear territory.

Of course, when the Fed begins pulling levers to steer the economy, the butterfly effects can be foreseeable. For example, when the Fed started raising interest rates last March to fight inflation, something predictable happened: the U.S. dollar strengthened, and “risk assets” like emerging market stocks took a swan dive.

The dollar soon hit a 20-year high, and almost every emerging market took it on the chin. For example, a fund with exposure to Asia shed 35% of its value by October. An ETF of Chinese stocks plunged 50%. Hundreds of individual stocks on foreign exchanges were down 70%, 80%, and even 90%.

Now that inflation is mellowing and the Fed is tapering its aggressive rate hikes, we think the reverse will happen in 2023.

Once the Fed stops tightening, the dollar will plummet, creating a gale-force wind at the back of foreign stocks. The emerging markets of Asia, which have seen their valuations crushed hardest in 2022, will rebound especially dramatically.

We could see a replay of the move following the financial crisis in 2009 when emerging markets jumped 79% — and tacked on another 19% the year after that.

Right now, many stocks in these markets are so cheap that they’re trading at “shoe-size” P/Es of 7-to- 9x… and yielding 6%-7%, to boot. They are currently some of the cheapest stocks in the world — and a no-brainer buy for anyone who thinks the dollar will pull back from its 20-year high.

Bottom line, we are probably looking at a massive bull run in Asia, Latin America, and Eastern Europe in 2023. Here are a few ways you can take advantage of this looming decline in the U.S. dollar — and subsequent surge in emerging markets.

Our first and simplest idea is through the iShares Emerging Markets ETF (NYSE: EEM) — it’s the one in the chart above. This exchange-traded fund (ETF) has a long successful history. It also provides investors with a “one-stop shop” for emerging markets.

Some of its top holdings include Taiwan Semiconductor, Samsung Electronics, Alibaba (BABA), Tencent (TCEHY), and commodity producer Vale S.A. (VALE).

Roughly 63% of its portfolio has exposure to the Asia/Pacific region, which was one of the hardest hit this past year, and one that we expect to see a dramatic rebound in 2023. If you want to narrow down your exposure to a specific country, well you are in luck. There are many ETFs out there that offer exposure to nearly every major country around the globe.

You could also identify specific stocks domiciled in foreign countries (like the EEM holdings I named above) and invest in individual names.

Personally, we like the ETF route. You can find the names (and ticker symbols) of some of our favorites in this year’s report, along with the rest of our predictions for 2023. Go here to learn more now.