Investing Forever – Investing Forever Advisory

What happens if the world stops using the U.S. dollar as its reserve currency?

Countries may want to move away from the U.S. dollar due to their dependence on the U.S., the need for diversification, and global economic shifts towards emerging economic powers.
If the world stops using the U.S. dollar as its reserve currency, it could potentially have significant impacts.
Investing in non-dollar-denominated assets can provide diversification benefits and potentially reduce the risk of a portfolio that is heavily concentrated in U.S. dollars.
Investors should carefully consider their investment objectives, risk tolerance, and other factors before making any investment decisions related to non-dollar-denominated assets.

The opportunity cost associated with the poor timing of initial investment allocations can be significant.
After missing out on a period of good performance some investors may be further compelled to employ additional timing measures that can further exacerbate under-performance.
Market timing, the tactical timing of when to be invested and when not to, although sensible at a high level, is far easier said than done.

Assuming a 7.2% annualized real return (including reinvested dividends), an investment will double in value about every 10 years following the rule of 72.
However, even with more modest assumptions significant wealth can be generated over time.

The rich continue to get richer, where the top 26 richest humans now control more wealth than the bottom 50%, based upon recent research from Oxfam.
Wealth has the capacity to grow exponentially after reaching a tipping-point, which can lead to a strong concentration of wealth among a small percentage of owners.
If you can’t beat ’em, join ’em.

Assuming a 7.2% annualized real return (including reinvested dividends), an investment will double in value about every 10 years following the rule of 72.
Given this rate of return, $1 can grow to $1000 after 100 years and $1 million after 200 years.
After enough gains in capital, incremental income can be consumed on a go-forward basis (practically indefinitely), without eroding the capital base (note: restrictions apply).