The Dollar is strong! 📰 #NYT
Hello fellow investors, here is another article for free just for you, thanks to my NY Times subscription. My goal is to share ten articles/month that are behind a paywall - cheers. 🍺
Speaking about strong USD (and weak EUR 😭), I have around 200k EUR sitting in my bank that I feel sad to convert into USD to invest. What to do 😰
I tend not to worry about fx rates over the long run, Euro dilemma - if you have roots in Euroland, find cos to invest in that generate a big ROE, FCF, and it “should” over the long run generate a greater return than the loss of euro strength…especially if the business is quite international - eg Nestle. (No position)
On the other hand, Europe has constantly shown itself to be weak in the face of crises. what my friends went through during covid in Belgium, Spain, Italy, and Germany…it’s ridiculous that the EU couldn’t have one policy and rule book to attack the spread, one healthcare war plan to vaccinate the population, and one financial plan to support the businesses.
Now with Russia-Ukraine, the EU seems to be in a lose-lose situation again. Where are they going to raise the funding for defense budgets, food and fuel subsidies, energy infrastructure?
They’re already quite inefficient - For example, I want to give some of my staff an annual net raise of 3000 euros. My accountant says it will cost our company 15000 euros! 80% taxes at a net salary level of 25000?! Why would people who can afford to leave, stay in europe? It’s in a vicious downward spiral if you ask me…a resurgence of the dark ages, hopefully following by a renaissance!
Don’t get me wrong, I love the people, the culture, and I’ve lived there for almost 40 years…but they’re unwilling to fix underlying issues because they kick that can down the road further…and they don’t stick together. It’s too fractured.
End of rant… 🙃🙏🏽
@passiveinvestor, hey, thanks for the reply.
I have been an Italian citizen living outside Europe for 13 years. I manage businesses in many different countries, and yes, I agree with you that the taxation in the EU area (generically) is a nightmare. But I have to say that the level of the welfare system is second to none.
Living in Dubai, if I want decent coverage for my family and me, I need at least $20k/year, and if I need to send my kid to school, it's another $10k each.
Let's not even talk about the cost of education in the US, where basically, a teenager needs to contract debts to study... I went to university in Italy for less than 2k/year... a joke.
There is no doubt that when I retire (I am not talking about retiring at 60 something, but more like 40/42), I will move with my family to Europe. Better life quality overall, in my opinion.
Anyway, from an investment point of view, I don't feel Europe is the best place to deploy my money. I dream about a more inclusive, connected, and strong EU, but I don't see this happening soon. So my money stays mostly in the US market in USD.
The FX problem will be an issue in the future cause if I want to live in the EU and I need a EUR passive income, if the exchange is bad, I can risk being short, but let's see.