Currencies Impact Stock Market Profits

2015 started with an eventful January. The continued decline of the Euro versus the US Dollar had a major impact on the stock markets around the world.

During January, the German DAX gained 9.1% and the S&P 500 lost 3.1%.
However, this is before taking into account the impact of currency price developments.

Measured in Euros, the German DAX gained 9.1% during January. However, measured in US Dollars the DAX only gained 1.7% during January.

Measured in US Dollars the S&P 500 lost 3.1% during the month. However, measured in Euros, the S&P 500 gained 3.9%.


Stock Market Profits in Dollars and Euros


European investors gained during January, regardless if they invested at home or in the US markets.

US investors had a more difficult month. They could have gained some profits from investing in the German DAX. But that would have required to short-term time the currency and stock market perfectly.

At Stock Trend Investing we do not pretend we are that skilled. We just follow the long-term trends and are happy with the January gains for the DAX.

Note that the S&P 500 is up 11.9% for the last 12 months, even after the 3.1% decline during January.

These developments show the benefits of having a global allocation of your investment portfolio.

Read here more about investing internationally and drop us an email when you have any questions on this.

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