Financial Insights

Travel Europe in 2017 For Real Value

Growing and preserving client assets ranks high in any wealth advisor’s job description. However, I have found that convincing clients to spend their money can be as important and sometimes equally challenging. Once the retirement cash flow analysis and budgeting has been accomplished, enjoying life should not be overlooked.

Travel continues to be the number one retirement activity that people look forward to according to a recent AARP report of those 50 plus. 99% of survey respondents said they are planning to travel in new year. 32% said they will be embarking on an international trip. International trips will be especially popular in the spring. England, the Caribbean and Mexico will be the top international destinations for these travelers.

Currently we find the Euro and British Pound both weakened against the U.S. Dollar. Brexit and other events such as the resignation of Italian Prime Minister Matteo Renzi have brought these currencies to 20 and 30 year lows against the U.S. Dollar. This creates incredible value for the U.S. traveler abroad. As you can see from the chart below the Euro has been under pressure as the greenback has been strengthening since September.

Euro vs U.S. Dollar Trailing Three Months Through January 3, 2017


Source: Google Finance

The reasons the dollar has strengthen include U.S. Treasury yields rising in anticipation of more U.S. government borrowing and higher Federal Reserve interest rates at a time when central banks in the euro zone are working to keep their short-term yields in negative territory. This equates to Europe being the most affordable it has been in years for U.S. travelers.  As you plan your trips, your destination’s currency shouldn’t be the deciding factor. But if you are looking for value, Big Ben and its surrounding neighbors sure do look attractive.

The foregoing content reflects the opinions of Advisors Capital Management, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.


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