{"id":15935,"date":"2022-11-27T23:56:00","date_gmt":"2022-11-27T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=15935"},"modified":"2025-09-18T10:08:59","modified_gmt":"2025-09-18T02:08:59","slug":"currency-exchange-risk","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/","title":{"rendered":"Should investors care about currency exchange risk when investing in US stocks?"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#A_question_from_a_reader\" >A question from a reader<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Forewoard\" >Forewoard<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#The_reasons\" >The reasons<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Taiwans_financial_assets_return_poorly\" >Taiwan&#8217;s financial assets return poorly<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Foreign_assets_have_currency_exchange_risk\" >Foreign assets have currency exchange risk<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#US_dollar_exchange_rate_is_very_stable\" >US dollar exchange rate is very stable<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Ordinary_people_cant_handle_it\" >Ordinary people can&#8217;t handle it<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#In_the_long_run_short-term_fluctuations_have_little_effect\" >In the long run, short-term fluctuations have little effect<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Taiwans_US_dollar_exchange_rate_is_very_stable\" >Taiwan&#8217;s US dollar exchange rate is very stable<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#The_actual_calculation\" >The actual calculation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#There_are_more_important_issues\" >There are more important issues<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#It_is_an_exchange_gain_not_loss\" >It is an exchange gain, not loss<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Where_does_exchange_loss_come_from\" >Where does exchange loss come from?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Devaluation_of_the_currency_itself\" >Devaluation of the currency itself<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Currency_is_a_complex_issue\" >Currency is a complex issue<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Closing_words\" >Closing words<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Table_for_US_stock_investment_toolset\" >Table for US stock investment toolset<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Special_reminder\" >Special reminder<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A_question_from_a_reader\"><\/span>A question from a reader<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><br>CJ raised this question regarding currency exchange risk on this blog. I think I can talk about this topic and share it with readers. Here are his words:<\/p>\n\n\n\n<p><strong><em>Hello, Mr. Andy, I have read a lot of knowledge about ETFs and US stocks in your blog, and I have benefited a lot. Thank you very much for your willingness to continue to selflessly introduce US stocks and ETFs for us to know and learn from. Let us have more choices besides Taiwan&#8217;s investment environment. I just want to ask you a question.<\/em><\/strong><\/p>\n\n\n\n<p><strong><em>I have seen some financial experts recommend that people should pay more attention to the risk of exchange rate when buying ETFs in the United States. They are worried that if they win the annualized return and lose the currency exchange problem, the total assets will become useless in the end? What do you think about this point of view? I&#8217;m sorry to disturb your rest during the weekend. I took the liberty to ask you a question. First of all, I wish you a happy weekend and be well.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Forewoard\"><\/span>Forewoard<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>These remarks by so-called experts are actually typical retail investors and unprofessional views that encourage short-term and swing operations, but I personally do not deny that similar remarks have their market and click-through rate, because the brainwashed concepts that most investors have been subjected to for a long time are also in this way, I remind you all again: &#8220;The common sense that everyone thinks is not necessarily correct.&#8221;<\/p>\n\n\n\n<p>Please note that successful investment &#8220;should not be short-term&#8221;, because there is no meaning, we are investing, not fortune-telling or prediction. And I have always been against short-term, it is difficult to accumulate satisfactory assets in short-term.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_reasons\"><\/span>The reasons<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The short answer is to ignore the currency noise and here are my reasons.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Taiwans_financial_assets_return_poorly\"><\/span>Taiwan&#8217;s financial assets return poorly<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Unless you only stay in Taiwan for the rest of your life, do not go abroad, do not surf the Internet, do not shop, and only invest in Taiwan stocks or local assets in Taiwan, then the exchange rate has basically nothing to do with you. <\/p>\n\n\n\n<p>Otherwise, you must face this problem, and there is no need to worry about this problem. Even Taiwan stocks are greatly affected by the exchange rate. Foreign capital accounts for about 40% of Taiwan stocks. When they sell Taiwan stocks and repatriate the funds back to the United States, the exchange rate of the New Taiwan dollar to the U.S. dollar will naturally fall sharply. Isn&#8217;t this year, right now, a good example?<\/p>\n\n\n\n<p>However, the return rate of Taiwan&#8217;s financial investment tools, including the stock market, is much lower than that of foreign countries.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Foreign_assets_have_currency_exchange_risk\"><\/span>Foreign assets have currency exchange risk<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Any foreign assets must have exchange rate issues; including the US dollar insurance policies that many Taiwanese invest in now, and of course US stocks.<\/p>\n\n\n\n<p>There is only one situation in which the exchange rate risk of the New Taiwan dollar against the U.S. dollar can be completely eliminated; that is, Taiwan\u2019s central bank follows Hong Kong\u2019s example and sets an official exchange rate of the New Taiwan dollar against the U.S. dollar from today, a fixed number, which is closely pegged to the rise and fall of the U.S. dollar. There will be no exchange difference between New Taiwan dollar and US dollar.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"US_dollar_exchange_rate_is_very_stable\"><\/span>US dollar exchange rate is very stable<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Compared to euro, RMB, British pound, or Japanese Yen; the exchange rate of the US dollar is very stable. Not to mention other non-mainstream currencies.<\/p>\n\n\n\n<p>In fact, only the U.S. dollar is the most influential right now (this topic is too big, so I will talk about it when I have time). Compared with other countries, the U.S. dollar exchange rate is relatively stable, and the U.S. dollar exchange rate cannot &#8220;fluctuate greatly&#8221; because the impact is too great.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.imf.org\/en\/Blogs\/Articles\/2021\/05\/05\/blog-us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low\" target=\"_blank\" rel=\"noreferrer noopener\">According to statistics from the Bank for International Settlements, the US dollar accounted for more than 70% of global official foreign exchange reserves in 2000 and about 60% in 2020<\/a>.<\/p>\n\n\n\n<p>In recent years, the US dollar&#8217;s share of global cross-border remittances has indeed declined due to the competition between the renminbi and the euro, but it still accounts for more than two-thirds of the repressive proportion. Moreover, the comprehensive national strength of the United States is still unique, and those who are alive now should still be like this in their lifetime.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Ordinary_people_cant_handle_it\"><\/span>Ordinary people can&#8217;t handle it<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Currency exchange issues involve too many levels, even greater than the stock market, and a country&#8217;s currency is the main manifestation of sovereignty, and it is also one of the two main tasks of central banks (another one is interest rates); therefore, exchange rates are typical political issues , not an economic or financial issue as most people think.<\/p>\n\n\n\n<p>Because of this, the exchange rate cannot be an issue that ordinary people can deal with. Buffett said this many years ago. In my previous post &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/04\/economic-and-forecasts\/\">How investors should look at economic trends and forecasts? <\/a>&#8221; I quoted him as saying, &#8220;If Fed Chairman Alan&nbsp;Greenspan&nbsp;were to whisper to me what his monetary policy was going to be over the next two years, it wouldn&#8217;t change one thing I do.&#8221; <\/p>\n\n\n\n<p>Long-term investors in U.S. stocks can ignore the exchange rate issue. The reason is very simple. Compared with the exchange rate fluctuations of the U.S. dollar (I know you are concerned about exchange losses), the return rate of U.S. stocks (such as ETFs in the U.S. stock market) is &#8220;very much larger&#8221;, and exchange rate fluctuations can be eliminated.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_the_long_run_short-term_fluctuations_have_little_effect\"><\/span>In the long run, short-term fluctuations have little effect<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>I personally only advocate long-term investment. As long as there is long-term investment, even if there is a short-term large exchange rate fluctuation, it can be gradually diluted; the reason mentioned above is that the U.S. dollar exchange rate cannot fluctuate greatly, because the impact on the world is too great.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Taiwans_US_dollar_exchange_rate_is_very_stable\"><\/span>Taiwan&#8217;s US dollar exchange rate is very stable<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>After reading this article, a friend also pointed out another experience worth sharing, which is worth adding here. Compared to our competitors in Asia (mainly South Korea and Japan), Taiwan&#8217;s exchange rate volatility against the US dollar is much lower than that of our neighbors, and has been so for a long time. The Asian financial crisis in 1997 is a very typical example. South Korea was nearly wiped out (my term is appropriate), Thailand was too badly hurt; both countries were in crisis; other Asian countries were more or less hurt, Taiwan was barely affected.<\/p>\n\n\n\n<p>Why was Taiwan barely affected by the 1997 Asian financial crisis? This incident aroused great discussion in the international financial circle afterwards. I personally think that compared with now, Taiwan\u2019s national power was stronger then:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is the twelfth largest trading nation in the world<\/li>\n\n\n\n<li>The world&#8217;s second largest foreign exchange reserve<\/li>\n\n\n\n<li>The first of the four Asian Dragons<\/li>\n\n\n\n<li>Almost no foreign debt, which is rare in the world<\/li>\n\n\n\n<li>Adopting a super-conservative and closed financial policy, with little connection with the international financial system (in fact, it is still the case now)<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_actual_calculation\"><\/span>The actual calculation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>More than 30 years ago, the U.S. dollar to the New Taiwan dollar used to be 1:25, but now it is 1:32. Based on this, investing for 30 years respectively represents Taiwan\u2019s investment in U.S. stocks or U.S. dollar assets. On the surface, it seems that the NT dollar has become smaller, so you will assume that you have suffered a 28% &#8220;exchange loss&#8221; ( Let&#8217;s use the word &#8220;exchange loss&#8221; here, and we will explain it precisely later). That sounds big, doesn&#8217;t it?<\/p>\n\n\n\n<p>But thirty years ago, if you invested in the US stock market S&amp;P 500 ETF, including dividends, you could get an annualized return of 10.65%, which can be calculated using my tool &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/11\/sp-500-index-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for S&amp;P 500 Index<\/a>&#8221; .<\/p>\n\n\n\n<p>Then you use my tool &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/05\/compound-interest\/\" target=\"_blank\" rel=\"noreferrer noopener\">Simple and compound interest calculator<\/a>&#8221; to calculate that if you invest with an annualized return of 10.65% compound interest, you can get the principal and interest and 20.82 times the return after 30 years.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"There_are_more_important_issues\"><\/span>There are more important issues<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"It_is_an_exchange_gain_not_loss\"><\/span>It is an exchange gain, not loss<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>After this article was published, I received a reply from a reader. I am very grateful to him for reminding me that &#8220;the exchange rate of US dollars and Taiwan dollars has changed from 1:25 to 1:32, which is an exchange benefit for Taiwanese investors, not an exchange loss.&#8221; Please see the reader&#8217;s commets at the end of this article for the original text. This drive me to deep dive the original question further.<\/p>\n\n\n\n<p>To invest in U.S. stocks, foreigners must use U.S. dollars. That is to say, Taiwanese investors must first exchange their NT dollars into US dollars, which may cause the exchange rate of US dollars to Taiwan dollars. Over the past 30 years, historical experience and facts have actually proved that the possibility of losing the NT dollar to the US that Taiwanese investors worry about does not exist at all. &#8220;The exchange rate of US dollars and Taiwan dollars has changed from 1:25 to 1:32, which is an exchange &#8220;benefit&#8221; for Taiwanese investors, not an exchange loss.&#8221;<\/p>\n\n\n\n<p>Unless you immigrate to US eventually, there is no need to exchange US dollars back to New Taiwan dollars. Because Taiwanese people will eventually realize the investment income in the end, that is, in the end, you sell the U.S. stocks, remit them back to Taiwan, and then exchange them for Taiwan dollars. In fact, your profit is much greater than you think, because assuming you invest in US stocks for 30 years. You have two incomes below:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Part one: thirty years of US stock capital gains, principal and interest and 20.82 times the return.<\/li>\n\n\n\n<li>Part two: in addition, after the depreciation of the NT dollar against the US dollar in 30 years, you will get part one above multiplied by 28% of the exchange profit; because 1 US dollar can only be exchanged for 25 NT dollars 30 years ago, now 1 US dollar can be exchanged for 32 NT dollars.<\/li>\n<\/ul>\n\n\n\n<p>If you immigrate at the end and you don\u2019t need to exchange US dollars back to NT dollars, then you can only get the part one listed above, and you will not have the part two. That&#8217;s a lot of money.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Where_does_exchange_loss_come_from\"><\/span>Where does exchange loss come from?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>But let me explain that most Taiwanese investors who invest in US stocks do not think too thoroughly, so that they are easily influenced by so-called experts or celebrities, because experts or celebrities need to attract audiences to maintain their popularity, so the point being made has to be provocative, and if the point is plausible, all the better. Remind investors that there is no impeccable investment point of view in this world, and investment points of view are very subjective; therefore, everyone can put forward a reason for investment. This is why many experts, KOL, or celebrities can survive.<\/p>\n\n\n\n<p>Many experts, KOL, or celebrities have very short-term investment views on this issue, because short-term investment views can cater to the needs of most people who need to find comfort when they are afraid of stock prices falling, especially during bear market. Since the beginning of this year, because of the &#8220;large fluctuations&#8221; in the stock market and foreign exchange market in a short period of time because of Taiwan&#8217;s investment, few people will not panic. <\/p>\n\n\n\n<p>If an investor converts NT dollars into U.S. dollars at this time, in case the exchange rate reverses in the next month or next week (it happened in recent weeks), most people will think that he is out of luck. The large fluctuations caused him to lose money in the short term. This is human nature. <\/p>\n\n\n\n<p>I think the so-called experts, internet celebrities or celebrities reminding Taiwan\u2019s US stock investors to pay attention to the possible losses in the exchange rate should refer to this situation (to meet the need of public\u2019s short-term loss psychology); more precisely, they take short-term investment profit and loss is still considered, and Swing trading or timing the market is encouraged.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Devaluation_of_the_currency_itself\"><\/span>Devaluation of the currency itself<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Another point I want to refute the opinions of so-called experts, KOL or celebrities is that according to their logic, in addition to exchange rate issues, currency must also include factors of currency devaluation (I wrote an article related to this on my blog &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/09\/29\/inflation-and-rate\/\">Tax, inflation and rate are the top three serious killers to investors<\/a>&#8220;) <\/p>\n\n\n\n<p>Moreover, the exchange rate will appreciate or fall (regardless of long-term and short-term factors), but the purchasing power of the currency caused by inflation will decrease (please refer to&#8221;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/19\/us-inflation-rate-querier\/\">Querier of US Inflation Rate<\/a>&#8221; I post previously, this tool is used to check the inflation rate of the country over the years), will depreciate all currencies in the world, and no currency is immune to this problem, so this problem is more lethal to investors. Investors should pay more attention to this problem, and the priority should be higher than the exchange rate. Isn&#8217;t it?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Currency_is_a_complex_issue\"><\/span>Currency is a complex issue<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>My starting point at the beginning of this article is to hope and remind Taiwanese investors to simplify things and directly regard the exchange rate factor as noise when investing in US stocks, and ignore this factor at all. Therefore, the initial idea of my entire article was designed in this way. Before I added the big section &#8220;There are more important issues&#8221;, the discussion was not complete and accurate, because in fact, currency itself is a very large topic and very complex issues. This is why the role of central banks in various countries is so important.<\/p>\n\n\n\n<p>Thanks again friends for giving me the opportunity to state my full thoughts. I took the opportunity to revise this article by including the section &#8220;There are more important issues&#8221; to fill in the relevant issues. After all, we still have to face the truth. Facts stand the test of time, not subjective opinions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Closing_words\"><\/span>Closing words<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Even if the number 28% is &#8220;exchange loss&#8221; (you can take it as the risk of investment), compared with the return of 20.82 times, the difference between the two returns is 74.36 times! Which one is persuasive? Therefore, discussing exchange rates is a waste of time and meaningless, unless investors focus on short-term foreign exchange speculation.<\/p>\n\n\n\n<p>Buffett also said similar things: Investors should spend their time on the long-term outlook, fundamentals, and competitiveness of the individual companies you invest in, ignore the noise. I quote a sentence from <a href=\"https:\/\/berkshirehathaway.com\/letters\/1994.html\" target=\"_blank\" rel=\"noreferrer noopener\">Buffett\u2019s letter to Berkshire\u2019s shareholders in 1994 <\/a>to share with you, &#8220;We will continue to ignore economic and political forecasts, which are an expensive distraction for many investors and businessmen.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Table_for_US_stock_investment_toolset\"><\/span>Table for US stock investment toolset <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Special_reminder\"><\/span>Special reminder<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>For all major market index annualized return query tools listed in the table; including Taiwan Stock Index, Dow Jones Index, S&amp;P 500 Index, Nasdaq Index, Philadelphia Semiconductor Index, not only annualized return query , you can also query the index return rate in any year\u2500\u2500just enter the year you want to query in both the start and end fields.<\/p>\n\n\n\n<p>The following is a list of must-have US stock investment free tools developed by Andy Lin:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>The online tool I develop<\/td><td>URL for the tool<br><\/td><td>For detailed function description, please click the description article directly<\/td><\/tr><tr><td><strong>Andy Lin&#8217;s Indices<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>Andy Lin self-compiled  Index, daily updated (including growth stock index, moat index, tracking stock index and other three major indices)<\/td><td><a href=\"https:\/\/granitefirm.com\/us\/\" target=\"_blank\" rel=\"noreferrer noopener\">Andy Lin&#8217;s Indices<\/a><\/td><td>&#8220;<a href=\"https:\/\/granitefirm.com\/us\/\" target=\"_blank\" rel=\"noreferrer noopener\">Andy Indices will be daily updated on the homepage<\/a><\/td><\/tr><tr><td><strong>Annualized rate of return and compound interest<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>IRR calculator<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/irr\/\" target=\"_blank\" rel=\"noreferrer noopener\">IRR calculator<\/a><\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/30\/irr-calculator\/\" target=\"_blank\" rel=\"noreferrer noopener\">IRR calculator<\/a>&#8220;<\/td><\/tr><tr><td>Simple and compound interest calculator<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/compoundinterest\/\" target=\"_blank\" rel=\"noreferrer noopener\">Simple and compound interest calculator<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/05\/compound-interest\/\" target=\"_blank\" rel=\"noreferrer noopener\">Simple and compound interest calculator<\/a>&#8220;<\/td><\/tr><tr><td><strong>Famous market index<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>Taiwan stock exchange<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/taiex\/\">Querier to Annualized rate of return for Taiwan Stock Exchange<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/15\/taiwan-stock-exchange\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Taiwan Stock Exchange<\/a>&#8220;<\/td><\/tr><tr><td>Dow Jones Industrial Average (DJIA) Index<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/djia\/\">Querier to Annualized rate of return for Dow Jones Industrial Average Index<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/19\/dow-jones-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Dow Jones Industrial Average (DJIA) Index<\/a>&#8220;<\/td><\/tr><tr><td>S&amp;P 500<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/sp500\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for S&amp;P 500 Index<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/11\/sp-500-index-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for S&amp;P 500 Index<\/a>&#8220;<\/td><\/tr><tr><td>Nasdaq<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/nasdaq\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Nasdaq Index<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/25\/nasdaq-index-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Nasdaq Index<\/a>&#8220;<\/td><\/tr><tr><td>Philadelphia Semiconductor Index <\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/sox\/\">Querier to Annualized rate of return for Philadelphia Semiconductor Index<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/05\/philadelphia-semiconductor\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Philadelphia Semiconductor Index (SOX)<\/a>&#8220;<\/td><\/tr><tr><td><strong>Important ecnomic data query<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>US historial GDP querier<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/gdp\/\" target=\"_blank\" rel=\"noreferrer noopener\">US <\/a><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/gdp\/\" target=\"_blank\" rel=\"noreferrer noopener\">GDP querier<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/29\/us-gross-domestic-product-gdp-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">US Gross domestic product (GDP) querier<\/a>&#8220;<\/td><\/tr><tr><td>Querier of US Inflation Rate<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier of US Inflation Rate<\/a>  <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/19\/us-inflation-rate-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier of US Inflation Rate<\/a>&#8220;<\/td><\/tr><tr><td><strong>Valuation<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>DCF (Discounted Cash Flow) Calculator<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/dcf\/\">DCF (Discounted Cash Flow) Calculator<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/11\/dcf-calculator\/\" target=\"_blank\" rel=\"noreferrer noopener\">DCF (Discounted Cash Flow) Calculator<\/a>&#8220;<\/td><\/tr><tr><td>S&amp;P 500 historical PE Ratio and average Querier<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/sp500pe\/\">S&amp;P 500 historical PE Ratio and average Querier<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/31\/14481\/\" target=\"_blank\" rel=\"noreferrer noopener\">S&amp;P 500 P\/E ratio has been rising in the past century, S&amp;P 500 PE Ratio and Average Querier<\/a>&#8220;<\/td><\/tr><tr><td><strong>Data share<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>Data and sample download<\/td><td><a href=\"http:\/\/www.granitefirm.com\/us\/tools\/filedownload\/\" target=\"_blank\" rel=\"noreferrer noopener\">Sample and file download<\/a><\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/27\/sample-and-file-download\/\" target=\"_blank\" rel=\"noreferrer noopener\">Sample and file download<\/a>&#8220;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>For the detail, please see &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/08\/investment-toolset\/\">Free online US stock investment toolset<\/a>\uff02.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"181\" height=\"117\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/11\/c-1600x1200-1.jpg\" alt=\"currency exchange risk\" class=\"wp-image-15936\"\/><figcaption class=\"wp-element-caption\">credit: canamcurrencyexchange.com<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/02\/24\/andy-lin-investment-style\/\">The key points of Andy Lin investment style<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/21\/permanent-capital-loss\/\">Permanent capital loss is the biggest risk that investors must face<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/09\/26\/long-term-investment-2\/\" target=\"_blank\" rel=\"noreferrer noopener\">Andy Lin&#8217;s long-term investment experience sharing<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/08\/invest-in-us-stocks\/\">How to invest in US stocks? sub-brokerage, and fintech<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/07\/02\/reciprocal-tariff-and-forex\/\">Reciprocal tariff and forex impact to investors<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/\">Should investors care about currency exchange risk when investing in US stocks?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/28\/sino-us-confrontation\/\">Will Sino-US confrontation, de-globalization, and de-dollarization affect the long-term investment value of US stocks?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/19\/us-inflation-rate-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier of US Inflation Rate<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/08\/13\/market-rise-after-rate-cut\/\" target=\"_blank\" rel=\"noreferrer noopener\">Will Fed rate cut gurantee stock market rise?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.bing.com\/search?pglt=299&amp;q=US+credit+rating+downgrade+by+Fitch%2C+the+reasons+and+implications&amp;cvid=a98b4c4ac7554a71b331287330439829&amp;gs_lcrp=EgRlZGdlKgYIABBFGDkyBggAEEUYOTIHCAEQ6wcYQNIBBzgzN2owajGoAgCwAgA&amp;FORM=ANSPA1&amp;PC=CNNDDB\" target=\"_blank\" rel=\"noopener\">US credit rating downgrade by Fitch, the reasons and implications<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/\">Should investors care about currency exchange risk when investing in US stocks?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/04\/economic-and-forecasts\/\">How investors should look at economic trends and forecasts? <\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/08\/investment-toolset\/\">Free online toolset for US stock investment<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/05\/compound-interest\/\" target=\"_blank\" rel=\"noreferrer noopener\">Simple and compound interest calculator<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/11\/sp-500-index-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for S&amp;P 500 Index<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/12\/04\/most-investors-should-invest-etfs\/\">Why most investors should invest ETFs tracking broad market?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/02\/08\/etfs-tracking-us-market\/\" target=\"_blank\" rel=\"noreferrer noopener\">US issued ETFs tracking US market is your best bet<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/12\/13\/top-10-etfs\/\" target=\"_blank\" rel=\"noreferrer noopener\">Top 10 ETFs and important major US stock market index<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Even if the number 28% is &#8220;exchange loss&#8221; (you can take it as the risk of investment), compared with the return of 20.82 times, the difference between the two returns is 74.36 times! Which one is persuasive? Therefore, discussing currency exchange risk is a waste of time and meaningless, unless investors focus on short-term foreign exchange speculation.<\/p>\n","protected":false},"author":1,"featured_media":15936,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1485,11],"tags":[],"class_list":["post-15935","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-forex","category-buffett"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/15935","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=15935"}],"version-history":[{"count":54,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/15935\/revisions"}],"predecessor-version":[{"id":38650,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/15935\/revisions\/38650"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/15936"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=15935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=15935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=15935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}