Whether you are from Switzerland or Australia, the (supposed) return on investment from the Vanguard International Stock Fund Index VGTSX since the first of the year amounts to a 6% loss in terms of it's basic US dollar NAV price. However, in terms of Australian dollars, VGTSX has lost an additional 8% on currency ( see
http://finance.yahoo.com/q/bc?t=6m&s...&z=m&q=l&c=fxa ) . In terms of Swiss francs, VGTSX has lost an additional 7% on currency ( see
http://finance.yahoo.com/q/bc?t=6m&s...&z=m&q=l&c=fxf ). Thus a recommendation to an Australian dancer to invest her Australian dollars in VGTSX would have been more affected by negative exchange rate fluctuations than by the negative performance of VGTSX itself !
Your US dollar centric view excludes the financial realities of global investors who live in countries whose 'home' currencies are not pegged to the US dollar. Those realities include direct losses of 'purchasing power' on US dollar denominated income, indirect losses on US dollar denominated investment vehicles (even if the US dollar value of those investments has increased marginally), etc. I would also add that this is not a trivial matter either, since 40-50% of all US stock and bond ownership is now in the hands of foreign investors.
I'm tired of disputing the virtues and risks of 'dollar cost averaging' and 'ultimate diversification' - everyone knows where you stand, everyone knows where I stand, and thanks to Stuart we now know where Warren Buffet stands. However, I will continue to point out the actual 'past performance' of your recommendations - in this case a 14% loss for an Australian investor over the past 6 months - which might not be immediately apparent if you refuse to do the math in Australian dollars.
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