Correcting performance for currency effects is a good thing when comparing stock indices around the globe (see here for currency adjusted performance). However, regular investors in domestic stocks don’t care about the price of the US dollar, they’re interested in the performance. For Dutch, Irish, Italian and Belgian buy-and-hold investors there’s bad news. Their national indices have an even worse performance when we forget about the currency effect (again from Paul Kedrosky):

During a decade there’s a lot of dividend to be returned to the investors. For the AEX this accounts for about 15 points on a yearly basis. After ten years you would have really lost only around 25%. Really? Well, you shouldn’t mention the inflation..

Jack
Jack