My portfolio is mostly in US equities. I am a long term investor, still 21yo, so I have a long horizon.
We have seen quite violent swings in the FX market the last few days. The Euro compared to the USD is now quite cheap, speaking historically. This means that I have profited massively from the drop in the Euro. Which luckily dampened my losses in the stocks, only down 9% YTD while being tech heavy.
I however do not like to be so over exposed to the USD, especially since it is currently arguably peak fear. If the Euro appreciates against the USD, i will lose more money.
What would you advice me to do against this risk? I use the broker DeGiro (EU broker) that sometimes has lacking derivatives available.
My thought was that i could buy an equal amount of shares of a stock on a European exchange and on the US exchange. For example i buy 20 Apple shares on the European exchange and also 20 on the US exchange, this way FX risk is eliminated. However not all stocks in my portfolio are double (or more) listed.
The second option was that I could maybe sell my entire positions in GOOGL and AMZN (both 4 stocks of each), and buy them back on the European stock exchange. This way approximately 40% of my money is in EUR. This would require much less transactions costs, and make it more easy to DCA.
What is your take? Should I even worry about FX risk as a long term investor? Experts sometimes point out that FX effects are dampened over longer periods of time.
Any advice is great, thanks! Good luck in these turbulent times, and my heart goes out to Ukraine🇺🇦.
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