1. Currency Stocks - U.S. Investors Reap Gains In Euro-Zone...

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Unformatted text preview: U.S. Investors Reap Gains In Euro-Zone Stocks WSJ, October 15, 2003 PARIS -- It's wake-up time. Most investors -- especially Americans -- pay little or no attention to currency movements. In fact, they tend to spend more time contemplating exchange rates when planning the details of a $2,000 ( 1,710) vacation than when investing $50,000 or more in a retirement fund. Many, including some of the most sophisticated, dismissively conclude that currencies are always moving around, so why care? Here is why: So far this year, euro-zone stocks have climbed 8.1% and Japanese shares are up 23%, according to Morgan Stanley Capital International's indexes. But to American investors, who tally their wins and losses in dollars, the sinking greenback has turned those rallies into advances of 20% and 34%, respectively. Not bad for doing nothing. By contrast, the 19% rise in U.S. stocks so far this year shrinks to just 7% in euro terms for a German, Italian, Spaniard or other investor from the 12-nation euro zone; it is just 9.4% for a resident of Japan, who keeps books in yen. Not great if you are trying to ride the global recovery in stock markets by focusing on the U.S....
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This note was uploaded on 09/27/2009 for the course UGBA 133 taught by Professor Distad during the Summer '08 term at University of California, Berkeley.

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