Jeffrey Lim

09 Aug 2020

∙

General Investing

Is currency risk a threat in buying overseas stocks?

I'm planning to buy ETFs in the S&P500 and maybe China too. May I know if currency is a risk to my returns if I'm planning to hold it long term (about 40 years) or should I diversify with Singapore STI too

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Yang Teng

08 Aug 2020

It defnitely is a concern when investing abroad. You should invest in a country where you are optimistic about the currency coversion with respect to SGD, else it will erode your returns. Professional investors or traders use forex hedging by buying or selling futures contract. If it is a of a great concern, you can choose to invest in an instrument that is SGD denominated.

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Related Posts

When buying foreign stocks, do you stock up on foreign currencies when it is at a low against SGD? Or only when u want to buy a foreign stock, you exchange whatever rates the brokerage give?

Which brokerage is recommended to buy Singapore stocks for dividends? Also, is it recommended for investors to use the same brokerage for buying SG and overseas stocks?

I am so frustrated! Every single time when i buy an ETF/stock, it just drops. I am not buying those high risk stocks or speculative investments, they are stable but yet this happens! Is it just me?

Should I buy stocks (E.g. Nikko AM STI ETF, Keppel Infrastructure Trust, Overseas stocks) for a stable dividend return as a 19 year-old investor?

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