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US Credit Rating Downgrade – What does this mean?

Fitch, one of the biggest credit ratings agencies in the world, has downgraded the US credit rating from AAA to AA+. Does this mean the US is in financial trouble? Some say yes, as their debt is becoming unsustainable as it gradually increases. Elections are on the horizon, and the government is spending more, meaning there is more interest, leaving future generations paying the debt from the last 5 to 10 years.

Others say it is sustainable at 132% of GDP as it is paid back through taxation.

Yet there wasn’t much movement in the dollar’s value, as most global transactions are still conducted in US Dollars, bolstering the biggest currency in the world.

While Americans might not be concerned and go about business as usual, it is still another dent in the dollar, which leaves investors concerned as the dollar might be losing credibility. This could be significant and mean the decline of the dollar over the long term.

Does this mean moving your investments to other currencies like the Euro or GBP?

Your investment advisor can address your concerns, make any adjustments to your portfolio, or offer solutions that can help mitigate volatility.

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