USD/EUR exchange rate

Hello,

I have a brain F… today, but i need to know something.
The USD/EUR exchange value is very low at the moment, often it is around 1,4 but currently around 1,1.
When the USD value goes up again and USD/EUR value reaches 1,4 for example, will i severly lose on my latests stocks?
Or will i benefit.

I currently have a few dividend stocks, i am afraid the percentage will be eaten away when the value goes up again…

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If you buy a US stock you buy it in dollars so you don’t have your Euro’s enymore, if the euro gows up 1% to the dollar you miss out on the increase because you didn’t have the euro’s (you loos 1% on you investment).

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Indeed, US stocks you buy now are relatively expensive in euro. I’ve been witnessing the rise of the dollar (or fall of the euro, as you like) on my portfolio in the past year since I joined Bux.

I have a few stocks where I am up several % even though my average buy price (in USD) is actually higher than the current stock price. :sweat_smile: All because the dollar is worth more now vs to when I bought.

So when this trend reverses and the dollar loses strength against the euro indeed your portfolio value is gonna be going down. I try to buy more euro stocks at the moment, if I buy stuff, and will add to US stocks when the dollar is cheaper (and of course the stock valuation favourable).

The upside right now is of course also that US dividends are worth more in euro, so the net amount you’re getting is higher than last year.

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Not entirely sure what to do now, from 1,1 to 1,4 is a major change.
I think i’ll keep my stocks for dividend and see what happens.
In the end it’s for long term dividends.
The few short term stocks, i’ll try to sell them when i am in the positives… :slight_smile:

Thanks,

I don’t think this subject is over yet, this is a significant issue i.m.o.

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Currency always fluctuates, that is entirely normal.
What you have to ask yourself is: Has something happened that would permanently lower the value of the Euro or not?

In my opinion, nothing like that has happened, which means it’s just normal market fluctuation and not something to worry about.

You can hedge against it by buying Euro stocks of course but the issue with those is that they generally don’t have paying a consistent dividend high on their priority list.
So there are very few reliable dividend payers in Euro stocks.

Personally I own 2-3 EUR stocks and the other 30+ are US/CAD and Chinese. I’m a dividend investor with about 10-15% growth stocks mixed in and for reliable dividends I’m afraid you have to look across the oceans.

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As JPeters said, nothing to worry about. Look at the past 20 years and there’s always ups and downs of the exchange rate.

I’m also very overweight on US stocks, so the past months were good, and later maybe I’ll experience the opposite. Still have the dividends to make up for part of it.

Just sit tight, as long as you are still confident in your companies in the long term, no need to stress.

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Just FYI and evt. for the ones who want to understand where we are talking about…

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Certainly an important factor to take into account. First question: what is the exact reference BUX takes to determine the spot rate for USD/€? Does anybody know which reference this is so I can integrate it in my datasheet?

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@Fergus