Does Currency Affect Your Returns?
What You Need to Know About Currency as an Investor
In this video, you’ll learn exactly how to understand your statements in relation to currency changes and how currency affects your portfolio.
What was covered in this video:
-
Why a strong US dollar means your investments represent more value while a weak US dollar is the opposite.
-
What a diversified portfolio is so important.
-
When you actually lock in your gains and losses.
-
What you should be focusing on instead of currency fluctuations.
A Review of the Currency Example in the Video:
Imagine that you have $1,000,000 US in investments and the US dollar is valued at $1.35 CD.
This means that in Canadian dollars your investments are valued at $1,350,000. But now if the dollar is $1.25, your investments will be valued at $1,250,000.
Nothing has happened to your investments in terms of the relative value of the underlying stocks, but the value of the currency has changed.
This is why when you hold investments in US dollars currency fluctuations will show up on your statements. However, over the long term, these currency fluctuations balance out and there’s no need to be worried about it.
Up Next:
Information in this article is from sources believed to be reliable, however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. The views are those of the author, SWAN Wealth Management, and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. Raymond James Ltd. is a Member - Canadian Investor Protection Fund. Raymond James (USA) Ltd., member FINRA/SIPC. Raymond James (USA) Ltd. (RJLU) advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered.
