alt Hacker NewsThat logic is flawed. The end value and ROI for S&P500 is the same regardless of the currency used to display it.
It's the same as complaining that the temperature increased more in Fahrenheit than in Celsius.
EDIT: The total value is the same regardless of the fluctuations of currencies used to represent the value. Those are two independent issues.
Currencies fluctuate even if you keep them in checking accounts without investing them.
And yes, if you measure distance in feet, your son will go every year further away than you because his feet keep growing, while yours stay the same.
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It makes sense if you're looking at it from the perspective of a European investor. e.g. You start with 1000 EUR, convert and buy into an S&P500 fund, wait a year, sell and convert back to EUR.
Celsius and Fahrenheit doesn't work as an analogy because the rate does not change over time as it does with currencies.
This analogy is flawed. The conversion formula between Fahrenheit and Celsius is fixed. Not so for currencies.
The roi is unfortunately not the same if you earn your money in euros and need to pay your taxes in euros. At one point one has to do a forex trade and that will be a loss for the euro investor
> That logic is flawed. The end value and ROI for S&P500 is the same regardless of the currency used to display it.
> It's the same as complaining that the temperature increased more in Fahrenheit than in Celsius.
No, that logic is flawed. Fahrenheit and Celsius are pegged to each other, the Euro and the USD are not.
The logic isn't flawed. If you are a European investor, then you care about the returns in your currency, and the fact is your pile of money only grew by 4%.
Inversely, as a US investor, if you invested 100€ in the eurostoxx 50, your pile of money would have grown to about $140 (20% index growth, 15% dollar debasement). It absolutely makes a difference, that's $20 more in your pocket compared to the index.
Your comparison with temperatures is wrong. Celsius and Fahrenheit are fixed units, whereas the value of currencies fluctuate.