Though to many of you this would be a no brainer, I'm not a professional investor. But I have a friend who is. He mentioned that one of the reasons to own blue chip U.S. stocks right now is that because people buy these stocks from all over the world. Because of this as the value of the dollar goes down, your blue chip stocks tend to go upward because as the value of the dollar decreases U.S. stocks become more reasonable to buy with other currencies. This drives the stocks up to their "actual" value in relation to all currencies and all other investments worldwide. So, in this way U.S. Blue chip stocks are a hedge against dollar currency devaluation. However, it must also be said nothing will protect you from dips in stock values from unexpected or even terrible expected occurrences worldwide. For example, if the Euro or European Stock markets go down because of debt problems with Greece, Ireland, Portugal, Spain or France or some or even all of them it naturally will affect all markets worldwide to a greater or lesser degree depending upon their location and their investments in European markets. Likewise, if there is a severe increase in oil prices, this could also affect markets around the world. Or if food riots became a problem in China or something like that because of inferior or poisonous food this could also roil world markets as well. But just in regard to only the Devaluation of the U.S. dollar, U.S. blue chip stocks are a hedge against dollar devaluation as such. I believe in only investing in dividend bearing stocks also to lessen risk if you are a long term investor. The Dividends tend to be another insurance against the risks incurred by long term investing.
Depending upon the laws and what is happening to the currency in your country around the world it might also be a hedge for you to be invested in the U.S. Stocks as well during these times of wildly fluctuating currencies worldwide. But before investing be sure to do enough research to find out if this would be true for you where you live as well.
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