I disagree. The exchange rate is extremely important. For an EUR investor, your return on a share priced in GBP is the return (+ or -) on the price of the share plus the return (+ or -) on the EUR /GBP exchange rate. See this thread FX costs of investing in sterling shares http://www.askaboutmoney.com/showthread.php?t=156634The exchange rate is almost irrelevant. .
are trading in a reasonable quantity, say, £50k make sure you ask your bank for best rate,
hi
i am planning to invest in a number of UK Blue Chip Shares that have the prospect of delivering good returns in the coming years and that pay good
dividends , i plan to hold these shares for the long term 10-20 years and to reinvest the Dividends , all going well.
However i am unsure about the exchange rate, if i buy uk shares now with an online broker am i at a disadvantage with the current exchange rate between the euro and sterling ? Do i lose up to 20% of my investment at the start because of this difference.
You miss my point. I have used TD Direct Investing. An excellent trading platform allowing one to trade shares in a choice of currencies. Unfortunately they cite a spread of up to 2% each way if you trade in a currency which is not your base currency. If you go to a bank you can negotiate an exchange spread at a fraction of that, but of course buy your shares on the trading platform - not sure banks even sell shares.Find and use a stockbroker for the currency exchange. Banks charge huge rates for dealing in shares, so check around and search the market for what what is available in the market.
Banks need to stick to what they know best. If they had of, the world finances would not have been in such a state.
The exchange rate per se is irrelevant. Across the Border you will find shops which will accept both € and £ so that a teddy bear for christmas might be priced at £40/€50 . Which one you care to chose does not matter, you get a teddy bear, not a sterling teddy bear or a euro teddy bear. Rory Gillen explains the situation well. A share is an investment in the underlying earnings of the company which may themselves have a currency angle but that has nothing whatsoever to do with the choice of currency for quoting the share price.I disagree. The exchange rate is extremely important. For an EUR investor, your return on a share priced in GBP is the return (+ or -) on the price of the share plus the return (+ or -) on the EUR /GBP exchange rate. See this thread FX costs of investing in sterling shares http://www.askaboutmoney.com/showthread.php?t=156634
The exchange rate per se is irrelevant. A share is an investment in the underlying earnings of the company which may themselves have a currency angle but that has nothing whatsoever to do with the choice of currency for quoting the share price.
The teddy bear does not carry any currency risk. Now if you go into that shop in Newry with £40 and €50 in your pocket, you have a choice. That choice is indeed a currency bet. However, I am presuming that OP does not have the choice between parting with £ or €, she only has €. It does not matter (except for FX transaction costs) whether she buys the Blue Chip Share straight with € or whether she converts her € to £ and then buys the share with £. I think PMU that we are getting a little too theoretical for OP. OP thought she was losing 20% straight off because she had to buy sterling to fund her share purchase. I presume you accept that she has got that wrong.If you buy anything, be that a share or a teddy bear in a currency other than your own and intend to sell it on, you are exposed to currency risk, i.e. the risk that the exchange rate between your own currency and the currency in which the share or teddy bear is priced will change by the time you wish to sell.
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