My Vrijheid Fonds consist of European and US stocks. The last couple of months the value of my Vrijheid Fonds is rising. The main reason (besides fresh capital) is the rising of the Dollar against the Euro. Dollar stocks are about 40% of my Vrijheid Fonds. So you can say that the Dollar is important for my portfolio.
The last 12 months the Dollar has risen more than 20% with respect to the Euro. This is good for companies in the US that import raw materials. In June from last year I got 1.36 dollar for every Euro. Today this is just 1.13!
For People from Europe it is getting more expensive to buy US products or visiting the US for holiday ( ;-( ) . For US citizen foreign products will be getting less expensive. I read a comment from an economics professor that a stronger Dollar and low oil prices are tailwinds for the stock market. So this will be good news for my portfolio. Or is it?
Some big companies in my portfolio are getting a big part of their turnover from out side the US. McDonalds, Coca Cola, Unilever and Aflac are such companies. Some of them have already given a warning during the presentation of their annual figures.
For my Vrijheid Fonds the value of stocks in the Dollars will benefit from a stronger Dollar 😉 However the turnover from a lot of companies will definitely not benefit from a stronger Dollar. And this will influence their profits in a negative way. ;-( But the worst thing about a stronger Dollar for me is that it is getting more expensive to buy new Dollar stocks ;-(
If the rising of the Dollar against the Euro continues I will have to formulate new goals for the value of my Vrijheid Fonds. At this moment my goal for the end of this year is approx. €60,000. I will keep you posted if I change my goal!
How much of your portfolio is influenced by the Dollar? Do you have insurance for the rising/falling of the Dollar?