[cjpearson]

It makes sense if you're looking at it from the perspective of a European investor. e.g. You start with 1000 EUR, convert and buy into an S&P500 fund, wait a year, sell and convert back to EUR.

Celsius and Fahrenheit doesn't work as an analogy because the rate does not change over time as it does with currencies.

[xvedejas]

I think it depends on whether you're planning on holding it in currency or using the currency to buy other things. Does the cost of material goods and services mostly stay the same in EUR, or does it somewhat follow the S&P? If more the latter, then converting to EUR is just a very temporary exchange and its nominal amount doesn't exactly matter.

[embedding-shape]

> Does the cost of material goods and services mostly stay the same in EUR, or does it somewhat follow the S&P?

I don't understand this question, are you asking if material goods and services in Europe, which uses EUR, "somewhat" follows the S&P, a US stock market index?

[nbadg]

I mean, for retail investors outside the US, the question you're asking boils down to „does purchasing power parity follow popular US domestic market indices?“, to which the answer is a resounding no.

There may be some offset for goods imported from the US, but that's a minority of consumer goods globally, and even then, the purchase currency will usually still be the local fiat, and then the attractiveness of the US index fund still has to be weighed against the performance of non-US-based indices in that same local currency as opportunity cost.

[rsynnott]

> Does the cost of material goods and services mostly stay the same in EUR, or does it somewhat follow the S&P?

... Wait, why would you expect the price of goods to follow the valuation of, well, any market index, never mind one specific foreign market index? Like, I don't understand why you think that would happen. If anything, you'd expect a minor inverse relationship, at least on a global scale; rapid growth of cost of goods indicates inflation, which implies central bank tightening, which tends to depress stock values a bit.

[rsynnott]

Also an American investor, really; an American investor who'd pulled out of S&P and moved to Eurostoxx at the time would have made something like 40% in their local currency (about half of it due to the decline of the dollar).