A weakening dollar typically is good news to U.S. manufacturers - their overseas sales bring more dollars stateside.

But it's bad news to American tourists - they now have to spend more dollars for the same products and services in foreign countries.

To investors, however, what the weakening dollar means is not so clear-cut. As with so many investing issues, the answer is "it depends."

"A falling dollar isn't necessary good or bad," said Jim Russell, director of core equity strategy at Fifth Third Bank.

"It's not like a vote of a lack of confidence in the U.S."

Whether a falling dollar will help or hurt your portfolio mostly depends on what stocks are in your portfolio, and where those companies do business.

Good for business

A falling dollar is best for U.S. companies that get a significant portion of their sales overseas.

Even without selling a greater number of products, they will see higher dollar sales. Because it takes fewer euros, pounds or yen to equal a dollar, flat sales convert into more dollars. Growing sales convert into even more dollars.

Procter & Gamble, for example, announced in its last quarterly earnings statements "a positive 3 percent impact from foreign exchange."

P&G stock is up 5.5 percent this year, including reinvested dividends.

Chiquita Brands International also recently attributed its 6 percent increase in net sales in part to the exchange rate between the U.S. dollar and the euro.

Shares of Chiquita are up 7.9 percent in 2003.

"Companies with the greatest amount of foreign exposure will experience the fastest revenue growth," Russell said. "In the current investment environment we have right now, this is good news."

Not too late

And even though the dollar has been weakening for several months - and companies like P&G have seen gains because of it - Russell said it's not too late for investors to take advantage of it.

"We absolutely think there is still room (for stocks) to go up dramatically from a revenue growth boost," Russell said, adding that the growth from currency exchange rates will be compounded later this year when a stronger economy adds more sales.

And the way to do that is to look for stocks whose companies have a high portion of sales coming from overseas.

Energy and technology companies are Russell's top choices, because they typically have almost half of their revenues tied to foreign operations.

(By way of comparison, the average for Standard & Poor's 500 companies is just 23 percent.)

Don't look for your international mutual funds or other direct foreign investments to get a boost from the weakening dollar, however.

"International funds trade on their own merit," Russell said. "It does not make enough of a difference for your international allocation to abandon it or increase it."

Contact Amy Higgins at 768-8373; ahiggins@enquirer.com; or 312 Elm St., Cincinnati 45202. She cannot reply to all individual questions.