Best exchange on which to trade

S

sapmanie

Guest
Due to exchange rates...

...you get more shares for your euros on US exchanges (you gain approx. 50% before you even start to trade: €100 = $146). However dividends are almost cut in half ($100 = €70).

...you get less shares for your euros on UK exchanges (you make a loss of approx. 30% before you even start to trade: €100 = £75). However dividends are up by almost a third (£100 = €133).

Which one do most people here trade on?

There are of course euro exchanges like DAX but the vast volume of data for research is on US/UK.

Thanks!
 
Your arguments about exchange rates make no sense - you're not losing 30% by buying in sterling - sterling is a different store of value than euro - your sterling stocks are still worth the same amount of euros but are just denominated in a different currency.

Similarly, you're not gaining by buying US $ stocks - if you converted them back into Euro you'd get exactly the same amount of euros back again. You get more shares in a basic number sense, but your value stays the same, therefore you do not make/lose anything unless the euro strengthens/weakens against the dollar/sterling.

I think if you only speak english you're better off sticking to english language exchanges - as you point out, you'll be able to benefit more from the available research (although most research is unreliable/biased - you should be able to reach your own conclusions by doing mathematical valuation and some background research on industry sectors/macroeconomic trends, regardless of the language/economy.

Edit to add - of more importance to your decision should be the taxes you'll pay on gains/dividends rather than some perceived 'gain/loss' on currency conversion.
 
I'm afraid this post has me completely flumoxed. The exchange rates make no difference where you trade.
And the shares available through through Euro exchanges aren't a whole lot different from those you buy through London or New York so what's the research issue? Maybe there's some deep point here, but I'm missing it
 
Money illusion.

Take temperature.

100 F = 37.8 C, but it's the same temperature.

100 miles = 162km, but same distance.

USD and GBP values tell you nothing about whether a share is cheap or expensive.
 
Hello,

I see that you can buy AIB shares on the ISE and the NYSE, named Allied Irish Plc Ads (AIB). I take it these are different types of shares in AIB?... on the ISE they are priced €13.30 and the shares on NYSE are priced $39.49.

Can anyone explain the differences in these shares and why they may preform differently i.e. AIB up today 15 cent on ISE and down 64 cent on the NYSE.

Thanks,
Docker.
 
docker said:
Hello,

I see that you can buy AIB shares on the ISE and the NYSE, named Allied Irish Plc Ads (AIB). I take it these are different types of shares in AIB?... on the ISE they are priced €13.30 and the shares on NYSE are priced $39.49.

Can anyone explain the differences in these shares and why they may preform differently i.e. AIB up today 15 cent on ISE and down 64 cent on the NYSE.

Thanks,
Docker.
Click to expand...

The shares are not 1 to 1. In the US the AIB shares are ADR's (google for more info). Each ADR is worth several 'Irish' shares.

The US market was closed on Feb 18th so its likely that you are comparing the price moves on 2 different days.
 
The key to the post is the opening line "due to exchange rates..."
Any gains could be wiped out by xrate movements which is why I was wondering why people trade on US/UK exchanges.
Example (ignoring transaction costs, etc. etc.)
1 share = $1 and xrate $1 = €1. Share rises $2. xrate unchanged => $2 = €2 => 100% profit
Now:
1 share = $1 and xrate $1 = €1. Share rises $2. xrate $2 = €1 => $2 = €1 => 0% profit.

So even though the share price doubled in both cases, due to xrate, they are all wiped out - you make 0% profit.

That was the point of my original post, sorry if it wasn't clear. I was wondering if people are really factoring in xrate movements when talking about trading on US/UK exchanges, and why not sticking with euro xchanges like DAX etc.
 
I see what you're saying but again the stock exchange you trade in makes no difference.

The important point is that if you buy a share in a company trading in a country with a different currency then you have an exchange risk - either an upside or a downside.

It's also true that if you buy a share in the Euro zone eg. CRH there may be an exchange risk because a percentage of its profits are made in dollars, which may affect the euro price of the share due to currency fluctuations.

You can be quite sure that most people who buy shares are aware of these exposures - though many see it as a form of 'diversification'
 
Thanks for the reply labguy.

So it would seem that investing in the US markets might not be the best thing to do at the moment then, with no end to the xrate drop in sight...(xrate cost + cg tax = ouch! :) )

Unless you reinvest in more shares rather than dividends of course, and hope for the $ = € xrate to improve at some point in the far future...
 
Can somebody answer a yes/no answer please. If I buy shares of AIB in $ will I own the share number of shares as if I'd purchased them in Euros? Please! No fancy answers because I've just started buying shares and you are confusing the life out of me with all your different answers! Txs
 
Not necessarily. Shares of non US companies quoted on US exchanges such as NYSE, NASDAQ etc. are usually (always?) in the form of ADRs/ADSs which can represent a multiple or fraction of the underlying actual shares quoted on the home or other exchanges.
 
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