WicklowGael
Registered User
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That seems like a valid point.Surely (market arbitrage excepted) the ultimate value of the share will be the same regardless of what currency the shareholding is denominated in?
What is TDG?
All things may not be equal - e.g. charges for trading on different exchanges (maybe a marginal concern for buy and hold long term investments), liquidity/activity on different exchanges, cross jurisdictional/witholding tax issues arising etc.So all things being equal, is there any advantage or disadvantage between buying on nasdaq v TDG
Hi, I have the bulk of my money invested in north American shares on the NYSE and Nasdaq and were purchased in dollars. I am trying to mitigate against the dollar losing its value over time. A lot of these companies also trade on the TDG in Germany. Am I right in thinking that by buying future shares on the TDG, if the dollar loses value, I will be protected against this currency loss by having purchased them in euro on the TDG,
Only on the time/day of the trade. For example, a share priced today at say 50 USD on the NYSE, should by priced at about 47 EUR on a eurozone exchange, at today’s exchange rate of 1/0.94 USD/EUR, before charges are applied,. But even if the share price remains static in USD, if the fx changes this will change the price in EUR, because of changes in the relative values of the currencies.Surely (market arbitrage excepted) the ultimate value of the share will be the same regardless of what currency the shareholding is denominated in?
Correct, because currency volatility generally has a low correlation with market risk. But this does not rule out situations where both equity markets and fx move in parallel. Here’s an example from SeekingAlpha Retail Currency Hedging For Your Equity And Bond Positions | Seeking Alpha . At the time of Covid, “a US investor who invested in the UK's FTSE 100 at the beginning of March 2020 would have in two weeks lost 25% from the indexes move lower and another 4.3% from the devaluation of the pound.”A lot of shares will have some in-built currency protection by virtue of large companies having assets and businesses throughout the world in other currencies.
We saw this when the pound lost a lot of value in the wake of Brexit, the FTSE 100 actually rose, mitigating some of the shareholders currency losses.
No, the exchange, and the currency you buy in make absolutely no difference.Am I right in thinking that by buying future shares on the TDG, if the dollar loses value, I will be protected against this currency loss by having purchased them in euro on the TDG,
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