Yesterday the Euro had fallen just beneath the $1.05! If I’m not mistaking, last year the Euro was still worth $ 1.39. Wow what a decline. And if I read all the blog post, articles and opinions of ‘experts’, this will go on for a while.
And I always try to look at the bright side of live! So the benefit of it is that my Vrijheid Fonds will be worth more. Because I will get more Euros for every dollar stock I own. Yippee and with almost 40% of my portfolio in Dollar stocks, this will be serious money.
I personally do not like a strong dollar for two reasons. First, a trip to the US will be much more expensive for me. But this is the pleasure side of life.
On the business side, my second reason: A strong dollar is in my opinion not good for companies/multinationals that depend on foreign sales. If your currency gets stronger, within a short period of time, in relation to the currency of your most important business partner, I think it is not good for your export. For instance, for US companies it will be much more expensive to sell goods in the European Union or Japan for instance. And because the US is an exporting country, this will be felt. The profits of these companies will be influenced in a negative way.
Look at the list of Dividend Aristocrats. The majority of them are real multinationals. They get their profits from all over the world. A stronger Dollar (the currency of their financial statements) will be hard on them.
So how long does it take before the Fed will take action?
Or will we reach Dollar – Euro parity?
Is a strong Dollar Good or Bad?
A lot of questions in my head. But no answers. What is your opinion on the rising of the Dollar?
I like to hear from you.
And remember: This is just a blog post from a normal European guy, with no professional financial education. So what do I know! I’m not an expert. But I see it is affecting my Vrijheid Fonds, in a positive and negative way.