Anonymous
For example if I bought stock in USD but the USD were to weaken (1SGD-0.73USD to 1SGD-0.75USD).
How will this affect the profit and loss?
And this is called foreign currency risk?
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Yes. But it seem that we have no choice, all the high growth company is in US.
yes, will affect the profit. But u need not change back to sgd once u sold. U can wait for a better exchange rate.
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Yeah FX risk is a factor to consider when purchasing foreign equity and this directly impacts profit and loss.
In your case for example, if you bought a stock at $73 USD / $100 SGD, and sold it at breakeven $73 USD, it would return ~$97.3SGD. And that's discounting any fx cost that you've incurred changing SGD to USD and back.
These are some of the inherent risk that you'll take, so it's important to factor this in when making your decisions. That said, if you believe that USD will appreciate, then the reverse is true - you could technically gain even if the equity remains flat.