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Benefiting From the Weak Dollar: Strategists

Published: Wednesday, 9 Sep 2009 | 12:03 PM ET

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By: JeeYeon Park
CNBC News Associate

Gold reached its highs at $1,000 while the dollar has been sinking to its lowest level this year. So is inflation on the horizon, and if so, how can investors prepare their portfolios? Marc Pado, U.S. market strategist, Cantor Fitzgerald and James Shelton, CIO, Kanaly Trust shared their investment strategies.

“I think we’re going to go lower on the dollar,” Pado told CNBC. “But to actually see inflation—not just inflation, but a hyperinflation—I don’t think that’s the case, certainly not in the next several years and it will come down to the exit strategy and whether the Fed pulls it off but I don’t think it’s going to be necessary for a couple of years.”

Pado said there is still a short-term trade for gold, but likes the large-cap multinational companies that have been doing “exceptionally well.” Additionally, he also likes the technology sector.

In the meantime, Shelton said September is a seasonally weak month for the dollar while it is strong for gold. He expects gold prices to continue rising.

“It all depends on the Fed’s exit strategy,” he said. “So at some point I think we’re likely to see that velocity of money tick up and that’s when our inflation risk is going to accelerate.”

Shelton said investors can play the falling dollar by owning gold and commodities.

“Own crude oil—you can own gold bullion,” said Shelton. “We particularly like the gold mining companies…and we think you need to own a broad basket of currencies as well.”