The Travel Discount of the Decade

Do you want to enjoy the finest bottle of Chianti under a Mediterranean sunset?

How about playing 18 holes at Le Golf National outside of Paris?

Or maybe you’re one for history, and a luxury tour through the side streets of Rome is on your bucket list.

Today I’m going to show you how to get there… using a travel discount that’s exactly one decade in the making…

Personally, I’d like to take the family island hopping through the Greek islands — where the turquoise water accents the colorful homes that blanket the cliffs.

Pictures

Whatever your dream European vacation may entail, I’m suggesting you book now.

Because for Americans, these once incredibly expensive European vacations are now more affordable than ever. Seriously!

A 5-night hotel stay on the cliffs of Santorini that once cost $715 is now just $555.

An upscale dinner under a gorgeous European sunset that once cost $143 is now just $111.

And a round at the Albatros Course at Le Golf National — the same course where the 2018 Ryder Cup was held — now only costs $195 for Americans. (Down from $251)

That’s a 22% discount!

But have you thought about WHY these European vacations are so cheap?

They certainly haven’t always been like this…

The REAL Reason Your Vacation Is Cheaper

Compared to the U.S. dollar, the euro has been under attack this past decade.

Chart

The downtrend started after the financial crisis in a “perfect storm” type scenario:

  • Investors sought U.S. dollars after the crisis because of its “safe haven” qualities in times of trouble.
  • Then, in 2014 the U.S. economy finally started to show positive signs of growth, which prompted the Fed to forecast interest rate hikes — a bullish scenario for the USD.
  • At the same time, the EU economy was stagnant and unemployment remained high. So while the U.S. was showing clear signs of growth, Europe struggled — and has continued struggling in the wake of the financial crisis to this day.
  • Throw on top the whole Greek Bailout scenario and the uncertainty surrounding Brexit, and the last decade really was a nightmare scenario for the euro, hence the 22% decline against the dollar. (And in case you’re wondering, the British Pound is also down some 18% against the dollar since 2010!)

So what does this mean for your dream European vacation?

Let me explain using the golf example above.

Let’s say in January 2010 you went on a European vacation and a round of golf just outside of Paris ran you 175 euros. At the time, that means you spent $250 (with Euro/USD rate at 1.43).

But today, with the Euro/USD rate at 1.11, that same €175 round of golf would only cost $194 (200 x 1.11).

Same course. Same location. At a 22% discount!

Bottle of wine? A trip to the top of the Eiffel Tower? A boat cruise along the coast of the Mediterranean?

For travelers exchanging dollars for euros it’s all 22% off!

Now do you understand why your vacation is now all of a sudden so inexpensive?

That’s the beauty of finance. Everything that happens in the world, no matter how big or small will impact the markets in some way. In this case it’s like the butterfly effect… for currencies!

And as an informed investor, understanding these correlations will help you to better take advantage of these cost-saving opportunities.

But you know that I’m not here to sell vacation packages…

I’m here to give you the tools to grow and protect your wealth.

And while saving $56 on a round of golf at a world-famous course is great, there’s a better way to benefit from this low exchange rate environment — no passport required!

Europe Is on Sale — But Not Forever…

There are a select group of companies that benefit most from this strong dollar/weak euro environment.

I’m talking about the European companies that also sell goods in the United States.

These companies benefit just like the hotel situation above, but in reverse.

Here’s an example:

Let’s take Volkswagen, a European-based company, and say they sell cars in the U.S. for $10,000 — unlikely, but let’s keep a round number.

Back in January 2010, that $10,000 in revenue would be converted back to around 7,000 Euros using the exchange rate at the time.

Now fast-forward to today. That same $10,000 in revenue converted back to Euros now earns Volkswagen over €9,000 — that’s a 28% jump in revenue!

Keep in mind here, nothing has changed about the car. These companies are simply benefiting from selling in the right place at the right time.

And to take advantage of this opportunity, here are a few European-based companies that sell in the U.S. who are major beneficiaries of this low exchange rate environment.

Fiat Chrysler Automobiles (FCAU) — This is the seventh largest auto-manufacturer in the world that produces well-known brands like Fiat, Chrysler, Dodge and Maserati. Headquartered in Italy and incorporated in the Netherlands, this company sells a huge amount of cars in the U.S.

And you may have even seen commercials for another line of cars that FCAU sells — Alfa Romeo. I personally see the commercials everywhere now. And it makes sense as to why they’re now starting to sell in the U.S…

Deutsche Bank (DB) — As Europe’s economy slowly gets back on the right track and rids itself of negative interest rates, traditional banks like DB will be among the largest beneficiaries. In addition, after Deutsche Bank’s checkered past and recent restructuring, we’re getting a huge discount on DB shares.

Unilever (UL) — This Dutch-British consumer goods company owns brands like Dove, Dawn, Vaseline, Lipton, Ragu and Dollar Shave Club. And in 2018, 16% of revenue came from the U.S., which means they’re a major beneficiary of this low exchange rate environment.

I’ll be keeping a close eye on the exchange rates and fundamentals shaping up in both the U.S. and Europe.

There are many moving parts to consider, but for now the future looks bright for these three European-based companies.

And in the meantime, “bon voyage” if you’re heading on your dream European vacation!

Here’s to growing and protecting your wealth!

Zach Scheidt

Zach Scheidt
Editor, The Daily Edge
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Zach Scheidt

Zach Scheidt is the editor of Lifetime Income Report, Income on Demand, Buyout Millionaires Club, Weekly Squawk Box and Family Wealth Circle — investment advisories dedicated to finding Wall Street’s best yields. He brings to the table impeccable investment management experience and a solid record of identifying oversized payout opportunities.

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