GBP £ to Dollar $ plummet

With the GBP against the dollar plummet how are fellow investors going about investing in US stocks?

I got one have just completely stopped!! :frowning:

I don’t tend to pay much attention to currency fluctation.

e.g. I wouldn’t let a 2% swing in currency put me off a 10% profit on equities (numbers for illustration)

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I started to track FX impact to my holdings a year ago, as I had an overall 1% loss on FX alone.

Nowadays I’m at about 1% profit.

From my experience, it’s rather negligible, well compensated by regular investing, and whilst major currencies may have over 10% swing over a couple decades, it is still dwarfed by any profits you’d make in the underlying investments.

Of course different consideration if investing in a minor or exotic currencies’ market.

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Don’t worry about it. It doesn’t really matter in the grand scheme of things.

It’ll go in peaks and troughs, if you’re long don’t worry.

treat it the same as you would the stock price, it has a small influence in that it can provide opportunities where it’s a bit better to buy/sell, but otherwise it shouldn’t impact your overall decisions.

there’s no telling how far the fx may drift or for how long, though usually it wobbles back and forth in the same range anyways.

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Theres another article I used to post but cant for the life of me find it. It basically highlighted the past performance differences if you hedged your portfolio over a 1/3/5/10/15/20/25 year period. The answer is generally everyone has a different risk appetite, but in general with taking a long term view, the costs of the hedge itself can outweigh the benefits of doing so.

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Currency hedges are only worth for short-term investments.

For more exotic currencies, the currency hedges are more expensive and when they exist.

Some currencies could be hedged with a more indirect approach, as some currencies are commodity currencies (e.g. currencies from oil producers), some more than others (depends on the weight of some commodities in their national economy), RUB, KZT, AUD, CAD.

It can be made by shorting the commodity that the country is heavy-dependent on exports to counter the fall of the associated currency or vice-versa.