In 2025, the U.S. dollar experienced one of its most challenging periods in over half a century. Against a backdrop of slowing global demand, a cautious Federal Reserve, and sticky inflation, the dollar lost value against several major currencies, including the Swiss Franc.
From groceries to airfare, everyday Americans may have noticed changes in purchasing power. And for high-net-worth investors? The implications go beyond travel budgets. The weakening dollar may significantly impact portfolios heavily concentrated in U.S. assets and the U.S. currency.
With the Federal Reserve now easing policy and inflation projections hovering near 2.6% through 2026, real interest rates are projected to compress even further. Meanwhile, debt levels continue to rise, and fiscal consolidation appears politically unattainable in the short term.
This combination of macroeconomic pressure and monetary accommodation may influence the dollar’s relative strength internationally. In short, the 2026 dollar situation could present potential challenges for dollar-based investments..
This article from LFA, Swiss Wealth Management, outlines approaches investors may consider to explore alternatives to the U.S. dollar while maintaining regulatory compliance.
Why the Dollar Is Vulnerable
Inflation’s Silent Tax
Inflation doesn’t need to hit double digits to disrupt portfolios. Even moderate inflation, when persistent, acts as a hidden tax, gradually reducing the purchasing power of each dollar over time.
Since 2000, the dollar has lost over 40% of its purchasing power due to cumulative inflation.
This slow erosion is rarely noticeable on a day-to-day basis, but its long-term impact on savings and investments may be significant. A retirement plan denominated solely in USD could experience reduced purchasing power over time.
U.S. Policy and Instability
From unpredictable tax policies to record-setting national debt, the U.S. faces ongoing macroeconomic uncertainty. Partisan gridlock in Washington adds further uncertainty, impacting everything from trade policy to fiscal spending.
This instability may influence financial markets and investor sentiment, potentially affecting dollar-backed assets. As the dollar becomes more politicized, its appeal as a neutral store of value may be perceived as less certain.
The Need for Currency Diversification
For high-net-worth individuals, maintaining a portfolio that is 100% exposed to the dollar could involve increased risk. Without currency diversification, fluctuations in the dollar may affect overall portfolio value. The solution may include assets denominated in currencies with lower correlation to the dollar.
At LFA, we have extensive experience helping clients consider strategies to manage the potential impact of currency fluctuations through a globally diversified strategy grounded in stability, currency discipline, and long-term vision.
The Swiss Solution: A Stable Anchor
The Swiss Franc Hedge
The Swiss Franc (CHF) has long been considered a hard currency, and for good reason. With inflation in Switzerland forecast at just ~0.5% in 2026 and the franc having strengthened against the dollar in recent years, the CHF is often regarded as a relatively stable currency for conservative investors.
While the dollar continues to reflect stimulus cycles and political pressures, the franc is backed by decades of prudent policy, independent monetary governance, and fiscal balance. For those interested in Swiss investments, the franc may serve as part of a portfolio designed for long-term stability.
Political Neutrality and Economic Strength
Switzerland’s neutrality is more than a historical footnote; it contributes to a stable economic and financial environment. With an AAA credit rating, low public debt, and a strong rule of law, Switzerland tends to be less exposed to certain geopolitical tensions than some other economies.
Unlike the U.S., where fiscal planning is often hostage to election cycles, Switzerland takes a long-term, disciplined approach to economic governance. For those seeking a potential buffer from U.S.-specific policy uncertainty, Swiss financial markets offer a combination of political calm and regulatory clarity.
Strategic Wealth Management in Switzerland
Custom-Built Protection
Wealth management in Switzerland is not just about opening an account; it’s about building a future. Swiss firms like LFA specialize in strategies that emphasize capital preservation, multigenerational planning, and individualized wealth approaches.
Portfolios are constructed not merely for growth but for resilience. This includes optimizing asset location, tax positioning, and global diversification based on your personal objectives.
Holistic Diversification
True diversification goes beyond stocks and bonds. LFA’s investment mandates can span multiple currencies, regions, and asset classes, ranging from traditional equity and fixed income to private equity, real estate, and alternative investments.
This broader lens is what makes Switzerland a leader in showing affluent individuals how to diversify wealth in a more robust, globally integrated way.
Tax Efficiency and Control
Swiss wealth strategies often include structures that may offer tax efficiency for non-U.S. residents; therefore, U.S. investors should coordinate with their tax advisors.
For example, while Switzerland generally does not tax private capital gains, U.S. clients must remain fully compliant with IRS rules, and advanced planning is used to help optimize tax positioning without circumventing U.S. obligations. This can be a significant advantage for Americans dealing with the IRS’s capital gains rules, as Swiss strategies offer sophisticated tools for tax deferral and streamlined reporting.
Combined with Switzerland’s inheritance laws and estate planning flexibility, LFA’s approach aims to provide a structured framework for complex wealth planning while maintaining full compliance with U.S. regulations.
Swiss Bank Accounts for U.S. Citizens
The Compliance Myth
Many wrongly assume that Swiss bank accounts for U.S. citizens are off-limits or legally dubious. That’s outdated thinking.
Thanks to FATCA (Foreign Account Tax Compliance Act), Swiss financial institutions like LFA operate within U.S. reporting requirements, and all accounts are fully reportable to the IRS, enabling clients to stay fully compliant while diversifying abroad.
Security and Professionalism
Swiss banking remains a global standard for asset protection. Clients benefit from secure custody, transparent reporting, and access to experienced financial professionals.
With LFA, you’re not just holding funds in a vault; you’re gaining a global advisory partner focused on disciplined wealth management rather than guaranteed outcomes.
The Gateway to Global Investing
A Swiss account isn’t the finish line; it’s the beginning. It’s the necessary gateway to building a global portfolio that aligns with international opportunities, while remaining compliant with U.S. laws and reporting obligations.
By opening a compliant Swiss account, you create the foundation for strategically diversified investing in stable international markets.
Explore Your Options With LFA
2026 is shaping up to be a volatile year for the U.S. dollar. Between inflation risk, policy uncertainty, and declining trust in domestic governance, the dollar’s purchasing power is under increasing pressure.
With decades of experience, LFA, Swiss Wealth Management provides guidance on portfolio diversification and currency exposure. Whether you’re looking for a potential strategic hedge, long-term capital preservation strategies, or access to international investment opportunities, our team can help structure your portfolio to manage risk and pursue resilience.
Schedule a confidential consultation with LFA today.
