Where to invest when dollar is strong

The greenback is on a tear, and that has implications for your stock portfolio. Although the value of the dollar is only one cross-current affecting the stock market, a little tweaking may be in order.

The U.S.

dollar index, which measures the value of the greenback against a basket of foreign currencies, has jumped 10% since it started to spike in early May. The buck should continue to strengthen as the Federal Reserve Board moves toward a tighter monetary policy and eventually higher interest rates, while central banks abroad are easing.

The good news is that a strong dollar is a sign that prospects in the U.S.

are bright. “It’s a confirmation that the U.S. economy is doing better than the rest of the world,” says John Toohey, who directs stock investments for USAA.