Will the 40-year bull market in U.S. stocks continue?

The wave of de-dollarization has attracted widespread attention in recent years as some countries have become less dependent on the U.S. dollar. This trend could have far-reaching implications for U.S. stocks, and some even believe it will end the 40-year bull market logic for U.S. stocks.

The end of the dollar hegemony! The era of de-dollarization is upon us?

The dominant position of the dollar is one of the core logic of U.S. stock investment, if the dollar is really de-dollarized, then U.S. stocks are bound to be greatly affected, not to mention really de-dollarized, or the position is slightly weakened, it is also likely to cause a huge impact.

However, after all these years, the dollar's position has never really been challenged. In the global reserve currency of all, the dollar has been stable between 60%-70%, and in all foreign exchange transactions, foreign exchange transactions containing the dollar is accounted for 88%, and in the past 40 years, it has never been weakened, and the second place containing the euro foreign exchange transactions also only accounted for 30%.

Since the dollar is so strong, and no one can really resist him, it is natural that hegemony has emerged. For example, he can go out to export inflation, the Federal Reserve prints money which is nothing new. The reason why such a large scale printing money has not led to runaway inflation, a large part of the reason is also because of the dominant position of the dollar, so that other countries to help him digest this part of the inflation, even if it really can not digest, like the past two years, then he will also be inflation to others, we all have to suffer together. And there is another point that you may not understand, that is, the United States can use the dominant position of the dollar to collect minting taxes from the world.

The more dollars issued, the higher the government's mint tax revenue, other countries he can only earn their own mint tax, while the United States because of the dollar's hegemonic position, he can collect mint tax from the world, which makes the Americans printing money to become more reckless. One more word, we are talking about all the dollar hegemony, we only talk about the phenomenon, not the original intention, we do not have to explore whether the United States is malicious in doing these things to disgust people, this inference is a matter of opinion, but if we only look at the phenomenon of what happened, it does lead to a lot of people's dissatisfaction, which is why there are always people in history want to subvert the dollar hegemony, and as we just said, recently this trend tide has picked up again.

So how will this de-dollarization affect U.S. stocks?

U.S. stocks have been on a long bull run since the 1980s, attracting the attention of global investors. However, this could change as some countries move away from the U.S. dollar as their primary reserve currency and adopt a policy of de-dollarization.

First, de-dollarization may result in less liquidity for U.S. stocks. Some countries may reduce their investments in U.S. assets, which could lead to a decrease in capital inflows to the U.S. stock market. This may affect the market depth and trading activity of U.S. stocks, thus increasing transaction costs and investment risks.

Second, de-dollarization may have an impact on the exchange rate of the U.S. dollar and thus on U.S. stock prices. If some countries reduce their demand for the U.S. dollar, it may lead to a depreciation of the U.S. dollar, which may have a negative impact on U.S. stocks. Investors need to closely monitor changes in global exchange rate markets in order to address exchange rate risks in a timely manner.

In addition, de-dollarization may lead to an increase in demand for other asset classes in some countries. Some countries may look for alternative investment options, such as their own stock markets, gold, real estate, etc., thus reducing their investment in U.S. stocks. This could lead to a decrease in demand for U.S. stocks, which could affect their prices.

Therefore, the wave of de-dollarization could have an impact on U.S. stocks and could end the 40-year bull market logic of U.S. stocks.

How should investors react to the impact of de-dollarization on U.S. stocks?

There is a recent turning change in the trend of the US dollar, that is, the dollar is about to completely shift from the appreciation cycle to the change of the depreciation cycle, which will have a great impact on the US stock investment in the near future, so how should investors respond to the impact of the de-dollarization on US stocks under the wave of de-dollarization?

Investors should pay close attention to the changes in the global economy and markets, and take corresponding countermeasures to reduce investment risks. In the face of uncertainty brought by de-dollarization, prudent and rational investment decisions will be more important. Investors should fully understand the market situation, manage risk well, allocate their portfolios reasonably and avoid over-reliance on a single asset or market. At the same time, it is important to pay timely attention to global economic and political developments, especially policy changes in those countries that may have an impact on U.S. stocks, as well as changes in the U.S. dollar exchange rate and capital liquidity, to adjust investment strategies and respond flexibly to market fluctuations.

In addition, investors can also consider diversification, including investments in other countries or regions in the stock market, gold, real estate and other areas, in order to reduce the dependence on U.S. stocks. By diversifying investment risk, one can better cope with possible market volatility and uncertainty.

Most importantly, investors should remain calm and patient, not be swayed by market sentiment, follow their own investment plans and long-term investment strategies, and avoid blindly following the trend or panic operations. The concept of long-term investment and value investment still applies, and investors should have a long-term investment vision, not be distracted by short-term market fluctuations, and keep focusing on company fundamentals and long-term investment value.

In conclusion, the wave of de-dollarization may have an impact on U.S. stocks, and investors should remain alert, pay close attention to changes in the global economy and markets, allocate their portfolios rationally, diversify risks, follow investment plans and long-term investment strategies to reduce possible investment risks, respond to market challenges, and remain calm and rational in their investment decisions.

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Note: The views in this article are for reference only and do not have any investment advice.