One of the side effects of a weaker dollar is that the returns for foreign investors who invest in US assets are diminished. While the value of the asset may rise in dollar terms, if the dollar is losing value, the investor takes a hit when they convert their funds back into their domestic currency. For example, while the S&P 500 has risen 20.2% so far this year in US dollars, investors outside of the US have generally seen much less impressive returns. In the table below, we looked at the YTD returns of the S&P 500 for investors in various currencies. Of the currencies we looked at, the only one that has seen a benefit from the currency translation is the Argentinian Peso. Returns have been diminished once fluctuations are taken into account for all other currencies. And of course some countries have been affected more than others. So far this year, Brazilian investors who bought the S&P 500 at the end of last year have lost nearly 12 reals for every 100 they invested on January 1st.
Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.
don't forget GOLD as a currency!
Posted by: Kid Dynamite | November 09, 2009 at 01:14 PM
From the perspective of foreign investors, this implies that the US market still looks relatively cheap (in some cases cheaper). So it's less surprising that the nominal S&P value just keeps rising.
Posted by: Jon Giddy | November 10, 2009 at 06:22 AM
Very good and useful things that you have written in your blog. I have seen very important tips of stock market and returns of currencies in your blog. Very informative thanks for sharing.
Posted by: Penny Stocks | November 11, 2009 at 06:12 AM
Great information you have been sharing here. Thank You.
Posted by: Penny Stock Alerts | November 25, 2009 at 06:18 AM
Yes, some investors also invest gold and silver in market.
Posted by: Penny stock ewsletter | November 25, 2009 at 06:20 AM
Really, I am very much appreciate on your penny stocks guidelines, Thank You.
Posted by: Penny Stocks | December 12, 2009 at 06:48 AM
In the U.S. financial markets, the term penny stock commonly refers to any stock trading outside one of the major exchanges (NYSE, NASDAQ or AMEX), and is often considered pejorative. The official definition of a penny stock is a low-priced, speculative security of a very small company, regardless of market capitalization.For more details visit us at : http://www.hototc.com/
Posted by: Penny Stocks | December 12, 2009 at 07:14 AM