Rand vs Dollar: Hedge your wealth in the USA to take advantage of its strong economy

The USA is an attractive long-term investment destination for South Africans seeking not only to protect their personal wealth, but also to qualify for alternative citizenship in a first-world country. The ‘land of opportunity’ remains one of the world’s largest economies with relatively low unemployment, low inflation and a diversified, growing economy.

High Net Worth Individuals consider hedging strategies a crucial component of growing and maintaining their personal wealth – a way to navigate the market forces and its fluctuations. Hedging looks to mitigate against currency risk and financial losses by investing in a buoyant, globally-traded currency rooted in a strong economy.

Invest to curb depreciation

One hedging strategy is to invest in dollars to protect against the rand’s ongoing depreciation. The rand’s buying power has decreased by 7.85% each year since its introduction in the early 60s, making the South African currency currently worth about 1% what it was in 1961.

By comparison, the dollar has depreciated in value by only 3.5% a year, which means the dollar today is worth 10% of what it was in 1961. This simple side-by-side look at the rand versus the dollar suggests that if the trend continues, which is highly probable, your wealth is better protected year-on-year if held in the American counterpart. 

Safeguard wealth amidst instability

With increasing unemployment, high government borrowing and an unstable economy, investing offshore has allowed South Africans the freedom to safeguard their capital in stronger opportunities across the globe. Major economic events can also negatively impact personal wealth, such as widespread corruption and unattractive labour laws that often discourage international investment from coming into the country.

By hedging in dollars, investors protect their wealth in the world’s unofficial currency which is easily traded across the globe in most financial markets. This also provides limitless benefits and opportunities for other avenues of personal growth, including ease of travel, international study or immigration.

Ease of investment

High Net Worth South Africans seeking to trade rands for dollars will find it surprisingly easy. There are few barriers to entry for first-time investors, particularly through the EB-5 Investment Programme which can be accessed via investment and immigration specialists, 12 Star Capital. In addition to securing personal wealth in dollars, the programme helps South African investors and their immediate family gain full USA citizenship to live, work and travel like an American. As an investor, there are few prerequisites. You do not need to find a sponsor or require a specific education, language or business experience.

Now is the perfect time to consider the most beneficial offshore investment for you and your loved ones. Secure your future, diversify your portfolio, trade rands for dollars to hedge against economic volatility, and gain a ‘plan B’ citizenship in the process.