# US 3rd worst sharemarket returns in the world for the last 3 years...



## theasxgorilla (6 May 2007)

...when converted to EUR.

Something that a lot of people DO NOT consider about international markets is how currency shifts can cancel out market returns.  

Consider this:  *the Dow Jones industrial average is in negative territory for the last three months* when converted into EUR.

An excerp from John Mauldins 'Thoughts from the Frontline' e-letter:

"In the US, we think of the stock market as hot. If you are in the rest of the world, you may not be as impressed. My friend Prieur du Plessis of Plexus Asset Management in South Africa created the following chart for me. It ranks 52 stock market indices around the world in terms of how they have done for the last 3 months, 6 months and 1, 2, and 3-year periods, in euros. The Dow is number 50 over the last three years (only 3.88% a year for the last three years!) and in negative territory for the last three months. Only one stockmarket, Venezuela, has been down over the last three years. (And deservedly so as their president is doing his best to destroy their economy. I feel for the people, as his policies will ruin what by all rights should be a prosperous nation.)"

Australia comes in at 9th for the last 3 months.  The whole list is below:


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## wayneL (6 May 2007)

An important point.

Traders in this market must be aware of this and takes steps to eliminate or minimize this.

Here are a few ideas.


Keep cash in AUD (not possible with all brokers)

Hedge your currency exposure by buying your AUDs back via forex. 

Try to balance long and short positions (can be tough in a one way market)

Expose less of your cash via leverage (options/futures whatever)

All of the above

In addition, if trading rather than investing, presumably your volatility of returns would be much higher than volatility in currency movements. I keep an eye on it, but it is not a major concern.

If your riding a 4 bagger it's not a big deal.


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