WEBVTT - Is a strong Singdollar always good news?

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<v Speaker 1>You're listening to a CNA podcast.

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<v Speaker 1>Welcome back to the Money Talks podcast. Confession Time. How

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<v Speaker 1>many of us were tempted to rush down to the

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<v Speaker 1>nearest money changer? The moment we found out that the

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<v Speaker 1>Malaysian currency had hit a high of 3.4 against the

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<v Speaker 1>Singapore dollar. I have to tell you that

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<v Speaker 1>was very real for me because like many Singaporeans, I

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<v Speaker 1>love a little joint in JB. Could drive to Malacca

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<v Speaker 1>maybe even hit up K L. What's not to love

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<v Speaker 1>about the Malaysian food and all the shopping? Not forgetting

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<v Speaker 1>the massages? I mean, when you convert that money,

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<v Speaker 1>it is just that much sweeter when you get more

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<v Speaker 1>bang for buck. Well, for your Singapore buck at least.

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<v Speaker 1>So in this episode, we wanted to get a little

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<v Speaker 1>crash course on currency fluctuations and how it can help

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<v Speaker 1>or even hinder us. And if we can even make

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<v Speaker 1>money off of these so-called lucrative rates to unpack it

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<v Speaker 1>all I have with me. Anya Rodriguez, she's a research

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<v Speaker 1>analyst at Value Champion. Hey, welcome to.

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<v Speaker 1>Hi, lovely to be here. Ok. So let's start with

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<v Speaker 1>what happened. We saw all that's happened in the currency markets,

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<v Speaker 1>latest search, I mean 3.4. That's mind blowing. This is

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<v Speaker 1>up 4.15%. I did the math uh since the year began.

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<v Speaker 1>Can this go even higher? You think? Can we look

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<v Speaker 1>at 3.63 point seven?

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<v Speaker 2>So obviously I'm not able to predict where the,

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<v Speaker 2>the exchange is going to go. But from MA S standpoint,

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<v Speaker 2>how we fix our currency exchanges is usually through a

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<v Speaker 2>policy called Sneer, the Singapore dollar nominal effective exchange rate.

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<v Speaker 2>So unless MA S changes, that I'm not really able

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<v Speaker 2>to say what's happening on the Malaysian side, whether the

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<v Speaker 2>exchange rates will change. But you never know with inflation changing.

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<v Speaker 2>And like Malaysia's domestic economy changing, there's always a chance

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<v Speaker 2>that

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<v Speaker 2>exchange rates will keep fluctuating and we will keep seeing

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<v Speaker 2>that amazing Singapore to Malaysia ring exchange. Do

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<v Speaker 1>you go to Malaysia often? I mean, now that we

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<v Speaker 1>have this really advantageous currency exchange,

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<v Speaker 2>not as often as I would like probably, you know,

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<v Speaker 2>maybe beginning of the year went to JB for the day,

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<v Speaker 2>you know, do your hair, do your nails, classic.

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<v Speaker 1>I mean, why not? Right? OK. So like as I

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<v Speaker 1>said earlier, I went to rush out exchange my dollars

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<v Speaker 1>for the ring. It is this a good move though?

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<v Speaker 1>Should I be the typical Singaporean? The moment the exchange

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<v Speaker 1>rate hits a high again, I should change as much

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<v Speaker 1>as possible. Should I be doing that?

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<v Speaker 2>I mean, you're never going to be able to predict

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<v Speaker 2>what's going to happen. But if you're comfortable with the

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<v Speaker 2>current exchange rate, why not? Right. Like if you think

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<v Speaker 2>that you're getting a good bargain, go for it,

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<v Speaker 2>the thing is that how much more it can change

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<v Speaker 2>is probably not that great. So, if you are happy

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<v Speaker 2>with what it is now, then just change your money now,

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<v Speaker 2>I guess.

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<v Speaker 1>Are there rules that I need to be aware of?

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<v Speaker 1>For example, money changers, they have set amounts that they're

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<v Speaker 1>allowed to change before they are so called sold out? Right.

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<v Speaker 1>So are there these kinds of unwritten rules that I

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<v Speaker 1>need to be aware of when I'm exchanging my sing dollars?

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<v Speaker 1>I

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<v Speaker 2>think because as a personal consumer,

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<v Speaker 2>the amount that we're changing is so little, we don't

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<v Speaker 2>really have to consider like what these money changers will

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<v Speaker 2>have to consider on their scale of changing money. So

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<v Speaker 2>if you're concerned about exchange rates always fluctuating. The other

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<v Speaker 2>thing that you can also think about is maybe if

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<v Speaker 2>you have things like you trip or revolut and

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<v Speaker 1>those are the multi currency cards. Yes, exactly.

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<v Speaker 2>So

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<v Speaker 2>instead of having to rush down to that money changer

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<v Speaker 2>every single time you want to lock in that good

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<v Speaker 2>exchange rate, you can always do it virtually as well

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<v Speaker 2>and then you can do it in smaller amounts more frequently.

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<v Speaker 2>And as,

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<v Speaker 1>and when you're comfortable, you can do more you can

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<v Speaker 1>do less at any given time. Actually, we did have

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<v Speaker 1>an episode about multi currency cards and it's like stored

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<v Speaker 1>value almost right when you have a digital wallet where

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<v Speaker 1>you can store a different currency at the time,

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<v Speaker 1>because the sing dollar is that much stronger. Right. How

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<v Speaker 1>much would you recommend? I do,

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<v Speaker 2>I personally don't change more than a few 100 at

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<v Speaker 2>a time unless I know I'm like stocking up for

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<v Speaker 2>a big trip that I'm going for. Yeah, because I'd

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<v Speaker 2>rather not have all of my money tied up in

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<v Speaker 2>foreign currency in the first place. Smart

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<v Speaker 1>move, smart move and on that note, right. Can you

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<v Speaker 1>please please explain to me

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<v Speaker 1>why currencies fluctuate so much? I mean, is this something

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<v Speaker 1>that is specific to the current economic conditions? Because we

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<v Speaker 1>have high inflation, high interest rates, things are a bit

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<v Speaker 1>haywire or is this something that is pretty typical?

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<v Speaker 2>So currencies will always fluctuate for many different reasons, but

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<v Speaker 2>primarily it all boils down to supply and demand of

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<v Speaker 2>your currency at the end of the day. Right? So

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<v Speaker 2>if there's more supply, then the prices will come down

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<v Speaker 2>and that can be dependent on many different things. Of course,

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<v Speaker 2>demand the same way it works with demand.

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<v Speaker 2>So if you export goods or if you sell things

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<v Speaker 2>like your domestic goods in the foreign market, people will

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<v Speaker 2>have to buy it in your home currency. So that

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<v Speaker 2>will increase the demand for your currency and that can

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<v Speaker 2>be all sorts of different things. For example, even if

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<v Speaker 2>you want to invest in foreign assets, you have to

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<v Speaker 2>do it in that foreign currency. So that will increase

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<v Speaker 2>the demand for that currency as well. Yes, mainly to

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<v Speaker 2>do with demand and supply. So, of course,

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<v Speaker 2>right now we're experiencing high levels of inflation. So then

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<v Speaker 2>some countries are experiencing higher levels of inflation than others.

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<v Speaker 2>And so some countries currency will be affected by that

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<v Speaker 2>more so than others. And that in turn will also

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<v Speaker 2>cause foreign investors to think of your currency to be

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<v Speaker 2>more of a safe haven. I see. Yes. So for example,

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<v Speaker 2>in the region, our currency is fluctuating a little bit

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<v Speaker 2>less than some of maybe the other

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<v Speaker 2>Southeast Asian currencies. So that can cause investors in the

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<v Speaker 2>region to maybe want to buy into Singapore asset.

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<v Speaker 1>Oh, so actually the strongest sing dollar is attractive to investors,

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<v Speaker 1>especially

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<v Speaker 2>if your dollar fluctuates less because then you have less

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<v Speaker 2>risk involved in because they're

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<v Speaker 1>seeing. Oh, that's pretty, there's a pretty good level of stability.

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<v Speaker 1>It doesn't swing a lot. I'm going to put my

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<v Speaker 1>money in this place. Yes. Ok. But doesn't that

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<v Speaker 1>mean though when it comes to imports and exports, if

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<v Speaker 1>my memory tells me correctly, a stronger sing dollar means

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<v Speaker 1>your exports are going to be more expensive. Wouldn't that

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<v Speaker 1>dampen demand then? Because if your exports are going to

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<v Speaker 1>be expensive, whether or not the buyer is going to

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<v Speaker 1>be able to afford, it comes into question. Right. Yes,

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<v Speaker 2>definitely. So actually, MA S does have like a goal

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<v Speaker 2>for the ex Singapore dollar and their goal is to

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<v Speaker 2>slowly and gradually appreciate the Singapore

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<v Speaker 2>dollar. And what you said is definitely true with the whole,

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<v Speaker 2>like if your currency is stronger, your exports are now

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<v Speaker 2>more expensive. But in Singapore's case, because we import a

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<v Speaker 2>lot of our materials to our factors of production as well.

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<v Speaker 2>So our imports will now be cheaper with the stronger dollar.

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<v Speaker 2>So we

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<v Speaker 1>make more money. That's nice to know. Yes. And

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<v Speaker 2>also because we are considered to have very high value exports,

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<v Speaker 1>also the perception of expensive exports from Singapore

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<v Speaker 1>already exist.

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<v Speaker 2>Exactly. So our exports are not as sensitive to high

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<v Speaker 2>exchange rates compared to maybe some other country.

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<v Speaker 1>That's fascinating. Ok, so obviously we all know what the

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<v Speaker 1>M E s has done in order to curb inflation.

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<v Speaker 1>It's an unconventional method that is near, right. Well, we

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<v Speaker 1>know the impact on the economy as you've just explained.

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<v Speaker 1>But what impact does it have on the Singaporean people?

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<v Speaker 1>How do we benefit or not benefit from a stronger

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<v Speaker 1>Singapore dollar?

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<v Speaker 2>Well, of course, the most direct thing is now your

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<v Speaker 2>online shopping is also much cheaper, right? Yes. So if

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<v Speaker 2>anything that we're consuming that is denominated in foreign currencies

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<v Speaker 2>will now be considered as cheaper to us. So that

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<v Speaker 2>can be your vacations, that can be your online shopping.

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<v Speaker 2>And also the main reason why the MA S has

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<v Speaker 2>been trying to appreciate the Singapore dollar is purely because

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<v Speaker 2>our inflation tends to be imported since we import everything.

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<v Speaker 2>So that also means that

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<v Speaker 2>for us, the idea is that now at home, we

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<v Speaker 2>will also experience a little bit dampen effects of inflation.

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<v Speaker 2>But then the idea is also that without this appreciation

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<v Speaker 2>of exchange rates, we might be paying even more domestically

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<v Speaker 2>because then now imported goods will be even more expensive.

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<v Speaker 1>So it is pretty important to keep that sing dollar

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<v Speaker 1>a float. Yes, for a considerable length of time.

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<v Speaker 2>Yeah, at least for us as consumers definitely to our benefit.

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<v Speaker 1>Ok. Ok. That's good news.

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<v Speaker 1>There was a time in the middle of last year

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<v Speaker 1>when it seemed that the China we're familiar with was

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<v Speaker 1>a completely different place when the rest of the world

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<v Speaker 1>moved on from the COVID-19 pandemic. As many as 300

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<v Speaker 1>million Chinese people were under some form of a mandatory lockdown.

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<v Speaker 1>There were only two things on my mind to find

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<v Speaker 1>food and to not go crazy.

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<v Speaker 1>Then suddenly the people decided to take things into their

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<v Speaker 1>own hands

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<v Speaker 1>for the first time in more than 30 years, protests

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<v Speaker 1>swept through China and just like that cove ended.

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<v Speaker 1>Join me, we do for a look back at the

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<v Speaker 1>extraordinary year in China and hear how it might have

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<v Speaker 1>changed the country for good

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<v Speaker 1>Red Wall inside China's Zero COVID World A two part

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<v Speaker 1>podcast series by C N A. It's available now on

0:09:41.820 --> 0:09:45.570
<v Speaker 1>the C N A and me, listen, apps, Spotify, Apple

0:09:45.580 --> 0:09:47.090
<v Speaker 1>and Google podcasts.

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<v Speaker 1>Let's now talk a little bit about tips on handling

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<v Speaker 1>cash if

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<v Speaker 2>you're thinking about holding cash. One thing that I thought

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<v Speaker 2>was a bit interesting is that now a lot of

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<v Speaker 2>banks are offering foreign denominated fixed deposit and the interest

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<v Speaker 2>rates on those look so much more attractive than Singapore

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<v Speaker 2>denominated fixed deposits. The reason that they're giving you this

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<v Speaker 2>better interest rates is because you are taking on the

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<v Speaker 2>currency risk, right? You don't know which way the currency

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<v Speaker 2>is going to fluctuate. So maybe that's something you want

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<v Speaker 2>to consider if you are a little bit more of

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<v Speaker 2>a conservative investor. But

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<v Speaker 2>some foreign currency exposure, you can also think about foreign

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<v Speaker 2>currency fixed deposits. But again, you have to understand if

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<v Speaker 2>the foreign currency depreciates against the same dollar, then you're

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<v Speaker 2>not getting that full return because you have to account

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<v Speaker 2>for the loss in the currency exchange.

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<v Speaker 1>This naturally means that things are going to be expensive

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<v Speaker 1>for tourists visiting us just thinking about the Malaysian people

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<v Speaker 1>who live and work here. Suddenly their cost of living

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<v Speaker 1>increases as well because

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<v Speaker 1>yes, they are earning in sing dollar, but they're also

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<v Speaker 1>paying higher because of that stronger Sing dollar. So I

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<v Speaker 1>guess it's a higher in but it's also a higher out.

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<v Speaker 2>Well, I guess for Malaysians who are working and living

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<v Speaker 2>in Singapore to them, the majority of their lifestyles already

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<v Speaker 2>denominated in Singapore dollar. They don't see that difference. But

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<v Speaker 2>now if they send money back home, that's a huge

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<v Speaker 2>difference to them. Yeah. So, I think more so this

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<v Speaker 2>will affect people who are crossing the border every day,

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<v Speaker 2>who are living in Ring and now have to spend

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<v Speaker 2>daily in Singapore. That's

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<v Speaker 1>painful. Ok. But what about the tourists? Do you think

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<v Speaker 1>that the stronger Singapore dollar means that

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<v Speaker 1>tourists are going to think twice about coming to Singapore

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<v Speaker 1>for a visit? Because things are just that much more expensive.

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<v Speaker 2>I think it will definitely be a factor. But from

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<v Speaker 2>my understanding, we do tend to attract a lot of

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<v Speaker 2>like higher net worth tourists. You know, people come to Singapore,

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<v Speaker 2>come to orchard road like that's what they think. So

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<v Speaker 2>maybe to this level of tourists, they're not going to

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<v Speaker 2>feel the impact of exchange rates as much.

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<v Speaker 1>Ok. Yeah. Ok. But what about the mid income tourists?

0:11:55.390 --> 0:11:56.439
<v Speaker 1>They might feel the pinch a

0:11:56.450 --> 0:11:58.819
<v Speaker 2>little bit more. I think so. And also even as

0:11:58.830 --> 0:12:01.340
<v Speaker 2>you and I can tell things just generally, even in

0:12:01.349 --> 0:12:04.190
<v Speaker 2>sing dollar are getting more expensive in Sing dollar. So

0:12:04.200 --> 0:12:07.179
<v Speaker 2>then to have that be compounded with the Singapore dollar

0:12:07.190 --> 0:12:10.869
<v Speaker 2>being even more expensive relative to their home currency. That

0:12:10.880 --> 0:12:13.340
<v Speaker 2>will definitely, they can definitely feel the pinch Ok,

0:12:13.349 --> 0:12:16.159
<v Speaker 1>so the stronger sing dollar,

0:12:16.770 --> 0:12:21.289
<v Speaker 1>I see it as benefiting us when we're spending in

0:12:21.299 --> 0:12:26.358
<v Speaker 1>Southeast Asia, for example, even, I guess even Australia, you

0:12:26.369 --> 0:12:28.479
<v Speaker 1>could consider it. I mean, the last I checked it

0:12:28.489 --> 0:12:32.789
<v Speaker 1>was 1 to 1.1. I'll take that does the strong

0:12:32.799 --> 0:12:34.848
<v Speaker 1>sing dollar have the same impact in

0:12:35.380 --> 0:12:39.229
<v Speaker 1>say the UK or the US further a field where

0:12:39.239 --> 0:12:43.030
<v Speaker 1>the currencies there do tend to be as stable as Singapore.

0:12:43.039 --> 0:12:45.710
<v Speaker 1>How does it compare in terms of impact?

0:12:45.719 --> 0:12:48.869
<v Speaker 2>So the US dollar is kind of like seen as

0:12:48.880 --> 0:12:52.209
<v Speaker 2>the world reserve currency, right? So most of the time

0:12:52.554 --> 0:12:55.223
<v Speaker 2>when our domestic policies are not going to have an

0:12:55.234 --> 0:12:58.174
<v Speaker 2>impact on the US dollar. And up until recently, the

0:12:58.184 --> 0:13:00.705
<v Speaker 2>US dollar was quite high against the SING dollar. I

0:13:00.715 --> 0:13:03.804
<v Speaker 2>think it was almost up to 1.4% at one point.

0:13:03.905 --> 0:13:07.325
<v Speaker 2>So for us, the US dollar was appreciating against the

0:13:07.335 --> 0:13:09.664
<v Speaker 2>Sing dollar. So for us, that was a little bit

0:13:10.119 --> 0:13:14.059
<v Speaker 2>not to our advantage. So because their currency markets are

0:13:14.070 --> 0:13:16.969
<v Speaker 2>probably much larger than ours, their demand for their currency

0:13:16.979 --> 0:13:19.280
<v Speaker 2>is much larger than the demand for the same dollar.

0:13:19.450 --> 0:13:21.400
<v Speaker 2>So I think we will have a little bit less

0:13:21.409 --> 0:13:23.729
<v Speaker 2>impact in that regard. I don't think going to the

0:13:23.739 --> 0:13:26.030
<v Speaker 2>US is that much cheaper now, I don't think it

0:13:26.039 --> 0:13:30.599
<v Speaker 1>will ever be cheaper. Unfortunately, that's just the nature of

0:13:30.609 --> 0:13:33.280
<v Speaker 1>the US dollar. The Greenback has always been known to

0:13:33.289 --> 0:13:36.969
<v Speaker 1>be that powerful that influential on the rest of us.

0:13:36.979 --> 0:13:37.829
<v Speaker 1>It's the king of the bus,

0:13:38.133 --> 0:13:42.754
<v Speaker 1>right? The other aspect about the sing dollar strength that

0:13:42.763 --> 0:13:45.374
<v Speaker 1>I wanted to throw across to you is when it

0:13:45.383 --> 0:13:49.353
<v Speaker 1>comes to investments, right? At money talks, we always want

0:13:49.364 --> 0:13:52.333
<v Speaker 1>to find out how is this going to affect my portfolio? Right?

0:13:52.343 --> 0:13:54.443
<v Speaker 1>How is this going to affect the funds I'm investing in?

0:13:54.453 --> 0:13:55.044
<v Speaker 1>So

0:13:55.333 --> 0:13:57.814
<v Speaker 2>when it comes to investing, it may not be that

0:13:57.823 --> 0:14:00.364
<v Speaker 2>good of a thing. If you're investing in foreign denominated

0:14:00.374 --> 0:14:03.483
<v Speaker 2>assets like stocks, for example, let's say you're investing in

0:14:03.494 --> 0:14:05.624
<v Speaker 2>Australian stocks and you bought it a year ago right

0:14:05.708 --> 0:14:08.987
<v Speaker 2>now that the Singapore dollar has appreciated against the Australian

0:14:08.997 --> 0:14:11.237
<v Speaker 2>dollar that will actually eat into your returns on your

0:14:11.247 --> 0:14:15.607
<v Speaker 2>Australian stocks. Because for example, if your stock has gone

0:14:15.617 --> 0:14:18.468
<v Speaker 2>up 10% but the Singapore dollar has gone up 2%

0:14:18.477 --> 0:14:22.398
<v Speaker 2>against the Australian dollar, then now your real returns will

0:14:22.408 --> 0:14:23.697
<v Speaker 2>only be about 8%.

0:14:23.708 --> 0:14:25.588
<v Speaker 1>So it shrinks my returns. Yes.

0:14:25.848 --> 0:14:28.307
<v Speaker 2>Whereas on the flip side, if you're investing in something

0:14:28.317 --> 0:14:31.797
<v Speaker 2>that is appreciating against the Singapore dollar, maybe the US dollar,

0:14:31.817 --> 0:14:33.417
<v Speaker 2>your returns will now be outside

0:14:33.502 --> 0:14:35.941
<v Speaker 2>because you get the returns on your asset as well

0:14:35.952 --> 0:14:38.901
<v Speaker 2>as the increase in the appreciation in the currency. If

0:14:38.911 --> 0:14:40.382
<v Speaker 2>you convert it back to sing dollar.

0:14:40.601 --> 0:14:43.031
<v Speaker 1>What about investing in local

0:14:43.041 --> 0:14:47.552
<v Speaker 2>stocks? People think that when you invest in local companies

0:14:47.562 --> 0:14:50.202
<v Speaker 2>that you are not exposed to exchange rate, currency risk

0:14:50.271 --> 0:14:52.901
<v Speaker 2>at all actually you have to watch out for what

0:14:52.911 --> 0:14:55.762
<v Speaker 2>you are investing in because a lot of companies they

0:14:55.771 --> 0:14:58.552
<v Speaker 2>also operate in foreign markets, right? So they have foreign

0:14:58.562 --> 0:15:01.211
<v Speaker 2>derived income. So if there's an exchange rate

0:15:01.306 --> 0:15:05.185
<v Speaker 2>that their foreign derived income may also fluctuate.

0:15:05.435 --> 0:15:08.185
<v Speaker 1>Wow. Ok. See I completely miss, yeah.

0:15:08.195 --> 0:15:10.375
<v Speaker 2>So you have to be a little bit wary. People

0:15:10.385 --> 0:15:13.036
<v Speaker 2>think about this a lot when they're thinking of us companies,

0:15:13.046 --> 0:15:15.825
<v Speaker 2>for example, the example people like to give is Nike

0:15:15.916 --> 0:15:18.236
<v Speaker 2>because Nike is a US company. So you think of

0:15:18.245 --> 0:15:20.145
<v Speaker 2>them as, oh, as long as the US economy is

0:15:20.156 --> 0:15:22.866
<v Speaker 2>doing well, Nike will be doing well. But actually Nike

0:15:22.875 --> 0:15:26.125
<v Speaker 2>only derives 46% of their income from the US market

0:15:26.135 --> 0:15:27.966
<v Speaker 2>and because they sell globally and the rest of it

0:15:27.976 --> 0:15:28.945
<v Speaker 2>is international.

0:15:29.219 --> 0:15:33.390
<v Speaker 2>So then if for example, the euro has a fluctuation

0:15:33.400 --> 0:15:36.770
<v Speaker 2>against the US dollar and maybe the Euro goes down,

0:15:36.780 --> 0:15:40.429
<v Speaker 2>then their foreign derived income can also decrease but then

0:15:40.440 --> 0:15:44.020
<v Speaker 2>they report on their balance sheet in US dollar. So

0:15:44.030 --> 0:15:46.380
<v Speaker 2>then their gross profit margin. I know it sounds a

0:15:46.390 --> 0:15:49.619
<v Speaker 2>bit technical but like that will be lesser because of

0:15:49.630 --> 0:15:51.210
<v Speaker 2>the income currency exchange.

0:15:51.229 --> 0:15:52.780
<v Speaker 1>No, I get that. I get that and I I

0:15:52.789 --> 0:15:56.020
<v Speaker 1>think you've explained it really, really well there because I'm

0:15:56.030 --> 0:15:57.330
<v Speaker 1>pretty sure every other

0:15:57.432 --> 0:16:01.903
<v Speaker 1>investor out there particularly retail investors will be thinking along

0:16:01.913 --> 0:16:03.942
<v Speaker 1>those lines that you just mentioned like, oh if it's

0:16:03.953 --> 0:16:05.862
<v Speaker 1>a US based, I'm pretty sure it's going to do. Well,

0:16:05.872 --> 0:16:08.293
<v Speaker 1>because by virtue of the fact that the US dollar

0:16:08.302 --> 0:16:10.662
<v Speaker 1>is already stronger than the Sing dollar, I'm safe. But

0:16:11.103 --> 0:16:14.833
<v Speaker 1>you have to look at the company's financials, you actually

0:16:14.843 --> 0:16:18.252
<v Speaker 1>have to look at and assess the company's financials. Think

0:16:18.263 --> 0:16:21.122
<v Speaker 1>about how much of their income actually comes from the

0:16:21.132 --> 0:16:22.763
<v Speaker 1>US market. Right.

0:16:22.773 --> 0:16:24.843
<v Speaker 2>So, if you're thinking of it in a Singapore context,

0:16:24.853 --> 0:16:25.543
<v Speaker 2>I think about the,

0:16:25.645 --> 0:16:28.315
<v Speaker 2>the most is usually to do with reeds. Sores are

0:16:28.325 --> 0:16:30.856
<v Speaker 2>like a way to invest in real estate, right? And

0:16:30.866 --> 0:16:33.755
<v Speaker 2>a lot of Singapore reeds have foreign properties where they're

0:16:33.765 --> 0:16:37.036
<v Speaker 2>getting foreign rental income. Yeah. So you have to see

0:16:37.046 --> 0:16:40.195
<v Speaker 2>like how much of their income is actually from foreign

0:16:40.205 --> 0:16:43.825
<v Speaker 2>economies and whether that will affect their own. So if

0:16:43.835 --> 0:16:47.495
<v Speaker 1>I'm investing in an that is in the US or

0:16:47.505 --> 0:16:49.575
<v Speaker 1>the bulk of my revenue is going to come from

0:16:49.585 --> 0:16:53.736
<v Speaker 1>the US market, that generally means I'm alright.

0:16:54.030 --> 0:16:56.030
<v Speaker 2>Yes, because the US dollar is strong. So when you

0:16:56.039 --> 0:16:58.840
<v Speaker 2>convert it back to the same dollar, it's still good. Ok.

0:16:58.849 --> 0:17:02.270
<v Speaker 2>Whereas if they're investing in European assets, for example, then

0:17:02.280 --> 0:17:04.079
<v Speaker 2>that might not be so good for us because right

0:17:04.089 --> 0:17:06.020
<v Speaker 2>now the Euro is a little bit weaker. Wow,

0:17:06.030 --> 0:17:09.109
<v Speaker 1>that was an eye opener because it really does make

0:17:09.119 --> 0:17:13.280
<v Speaker 1>you think about your portfolio and really reconsidering what the

0:17:13.290 --> 0:17:16.040
<v Speaker 1>strategy should be. That being said though,

0:17:16.328 --> 0:17:20.779
<v Speaker 1>does this mean that I should be rooking my portfolio now?

0:17:20.788 --> 0:17:24.058
<v Speaker 1>And changing my strategy and ducking out or what should

0:17:24.068 --> 0:17:25.138
<v Speaker 1>I be doing then

0:17:25.400 --> 0:17:28.689
<v Speaker 1>considering this is where we're at with the sing dollar.

0:17:29.010 --> 0:17:32.560
<v Speaker 2>Well, I think personally there's no reason to be impulsive

0:17:32.569 --> 0:17:35.500
<v Speaker 2>because if we are worried about exchange rates and all

0:17:35.510 --> 0:17:37.689
<v Speaker 2>the more these companies will be worried about exchange rate.

0:17:37.699 --> 0:17:39.650
<v Speaker 2>So actually what a lot of these companies do do

0:17:39.660 --> 0:17:42.609
<v Speaker 2>is they hedge the exchange currency risk on their end.

0:17:42.880 --> 0:17:45.119
<v Speaker 2>So there's a lot of like financial derivatives that they

0:17:45.130 --> 0:17:47.560
<v Speaker 2>can do. So they kind of have more of a

0:17:47.569 --> 0:17:50.709
<v Speaker 2>stable idea of what the currency exchange will be.

0:17:51.119 --> 0:17:55.250
<v Speaker 2>So you can kind of defer this responsibility to some

0:17:55.260 --> 0:17:58.780
<v Speaker 2>extent to the company itself and let them hedge the

0:17:58.790 --> 0:18:01.488
<v Speaker 2>currency risk for you. So what's important for you to

0:18:01.500 --> 0:18:04.229
<v Speaker 2>do it as an individual investor is just to understand

0:18:04.239 --> 0:18:05.969
<v Speaker 2>like what is the nature of the business and whether

0:18:05.979 --> 0:18:08.560
<v Speaker 2>you're comfortable with that. So unless there's some like big

0:18:08.569 --> 0:18:11.510
<v Speaker 2>macro economy thing that is happening, for example, like the

0:18:11.520 --> 0:18:12.430
<v Speaker 2>Russia Ukraine thing,

0:18:12.512 --> 0:18:14.622
<v Speaker 2>you don't want to hold your assets in like Russian

0:18:14.633 --> 0:18:16.613
<v Speaker 2>denominated assets, right? That's

0:18:16.623 --> 0:18:19.141
<v Speaker 1>although I'd be fascinated to find out who has,

0:18:20.003 --> 0:18:22.071
<v Speaker 2>that might be a little bit different, but we're talking

0:18:22.083 --> 0:18:24.912
<v Speaker 2>about smaller fluctuations and in exchange rates then, yeah, I

0:18:24.922 --> 0:18:26.583
<v Speaker 2>don't think there's any need to be impulsive.

0:18:26.593 --> 0:18:30.842
<v Speaker 1>That's fantastic advice. Thanks for helping us dig deeper into

0:18:30.853 --> 0:18:33.821
<v Speaker 1>what the strengthening of the Singapore dollar

0:18:33.906 --> 0:18:36.984
<v Speaker 1>means. And of course, thanks to you our listener. If

0:18:36.994 --> 0:18:40.095
<v Speaker 1>you've enjoyed this episode of Money Talks, there's more content

0:18:40.105 --> 0:18:43.095
<v Speaker 1>for you to enjoy. Simply follow us on Apple podcasts

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<v Speaker 1>or Spotify. Leave a review. Give us five stars. Why

0:18:46.494 --> 0:18:50.295
<v Speaker 1>don't you? The team behind Money Talks is Joanne Chan, Jacquelyn,

0:18:50.306 --> 0:18:54.926
<v Speaker 1>Chan Christina Robert Charlene. So, and I'm Andrea Ha.