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AACreditUnion.org | | 15 A strong dollar aff ects the economy The U.S. dollar gained in value compared to the currencies of every one of its peer countries last year. That means U.S. consumers today pay less for oil and other imported goods, keeping infl ation down while increasing Americans' purchasing power. But a strong dollar isn't all good news. It makes U.S. exports more costly for foreign buyers, and some big multinational corporations are complaining this is hurting profi ts. So is a strong dollar good or bad? For the most part, it's good. Consumer spending is a far more powerful factor in the U.S. economy than multinational profi ts. A rising dollar also attracts foreign investors to the U.S., and that keeps our interest rates down. "There are a number of different economic indicators that affect individuals, but three are prominently watched in today's market," says American Airlines Credit Union Financial Advisor Rod Chisholm, CFP. "Gross domestic product, or GDP, which represents the total dollar value of all JRRGVDQGVHUYLFHVSURGXFHGRYHUDVSHFL¿FWLPH period, the unemployment rate — the percentage of people out of work and looking for employment, DQGWKHLQÀDWLRQUDWHPHDVXUHGE\WKHFRQVXPHU price index (CPI) program, which produces monthly data on changes in the price level of a market basket of consumer goods and services purchased by households." However, some experts suggest ignoring indicators altogether. "If you are using economic indicators to EDVH\RXU¿QDQFLDOSODQRQ\RXQHHGDQHZVWUDWHJ\ SODQDQGDGYLVHU´VD\V6FRW6+DQVRQD¿QDQFLDO planner in Shoreview, Minn. "If you have the right ¿QDQFLDOSODQHFRQRPLFLQGLFDWRUVVKRXOGQRWPDWWHU´ Whatever you do, avoid getting caught up in headlines. "It's easy to get bogged down in day- to-day gyrations in the markets, when what really matters is longer term trends," says Schenk. He and others suggest watching indicators and talking DERXW WKHP ZLWK ¿QDQFLDO DGYLVRUV EXW PDNLQJ changes to your investment strategy and portfolio no more often than a few times a year.