Currency Matters

CURRENCYMATTERS HOW IT WORKS Example: If you buy Toyota stock and there is no change in the stock price, but the value of the Japanese yen increases against the dollar, you willreceive more dollars when you sell the stock and convert it back to US dollars. One of the most important factors in foreign investing is also one of the most ignored. When you invest in foreign stocks you are placing two bets at once: one bet on the performance of the securities you are investing in and a second bet on the performance of the US dollar. A weaker dollar helps foreign holdings which has boen the trend for the last 9 yoars through 12/31/2011. U.S. S RISES A strong dollar retative to foreign aumencies mears that as the dollar rtses, foreigninvesemene reurns dectine. HOW FOREIGN INVESTMENTS ARE HELPED OR HURT BY THE U.S. DOLLAR FOREIGN INVESTMENTS DECUNE Foreign investments are measured using the MSCI EAFE - a collection of developed market foreign stocks. A weak dollar relaeve to NOV 78 - FEB '85 foreign currenciles means that as the dotartfats, foreign Investment resums se. FOREIGN RETURNS ARE HURT BY A STRONG U.S. DOLLAR Ratutve vale of te $. St00 - Jan 1, 1900 (-119.6% $110.5 TOTAL CURRENCY MPACTDUETOA RISING DOLLAR U.S. S FALLS FOREIGN INVESTMENTS RISE Annual performanca of MSCIEAFE ndex In local cumency IN DOLLARS s83.9 MAR '85 - JUN '95 WHERE WILL THE DOLLAR GO NEXT? FOREIGN RETURNS ARE HELPED BY A WEAK U.S. DOLLAR $110.5 Here are some factors tha might Influence the dollars rise and faL. +326.5% Global Anancial Crisas TOTAL CURRENCY MPACTDUETOA Geopolitical Risk Other countrtes prine money fasser than the U.S. Fed FALUNGDOLLAR RISING DOLLAR MSCI EAFE $49.39 n local cumency IN DOLLARS JUL '95 - MAR '02 • Low US Interest rates through 20128 beyond -57.3% • Globat sabilky • The reum of global growh FALLING DOLLAR $72.38 TOTAL CURRONCY MPACTDUETOA RISING DOLLAR 549.39 MSCI EAFE n local cumency TOTAL RETURNS FROM APR 2002 - DEC 2011 IN DOLLARS APR "02 - DEC '11 +54.4% $72.38 TOTAL CURRENCY IMPACTDUE TOA +54.4% FALUNG DOLAR $45.24 TOTAL CURRONCY MPACTDUETOA MSCI EAFE In local cumency FALING DOLLAR Over the last 9 years, a weakening dolar provded mostol he retum for US.basedimestors IN DOLLARS Sourca MSCL Wom T, C n Wh Senc, Moningstar GLASSMAN Epiore the Ditterence www.Glasmanweatth.com CIor Kelefint designs WEALTH SERVICES, LLC %619 Anuna 94% MICIEAFE XTE хт6 X600