A Weak Dollar Ain't All Bad

If you—or your mutual fund—own shares in large American corporations, you're a winner in the weak-dollar sweepstakes. Based on data culled from 238 constituents of the Standard & Poor's 500 Index, S&P analyst Howard Silverblatt concludes that the typical member of the index garnered 44.2% of its sales outside the United States in 2006. Translating cash received from those sales into weaker dollars puts some fizz into earnings. Last week Coca-Cola's stock bubbled to a 5-year high after it reported a fantastic quarter. Foreign sales accounted for 65% of Coke's beverage business. Other American companies profiting from this trend include McDonald's (65% of sales overseas) and IBM (56%).

From "The Sinking Dollar Has An Upside" from Danial Gross at Slate.com

MP: Other advantages of a weak dollar for U.S. investors:

1. The weak dollar has made U.S. stocks (and real estate) more attractive to foreigners, resulting in especially strong foreign purchases of U.S. securities, helping support higher U.S. stock prices (and real estate prices in some markets).

2. U.S. investors holding foreign foreign stocks or international mutual funds have benefited from the appreciation of most major foreign currencies against the U.S. dollar, which has raised the dollar value of U.S.-owned assets abroad.