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delite1

Pound And Euro Accounts

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Got talking to a guy yesterday who said he was telling his banker in Switzerland on Monday to convert half his cash holdings into Euros keepng the other half in pounds. The more I think about this the more confused I'm getting. His view is that if the pound tanks he'll make money on the conversion back into pounds. However if the Euro tanks his pounds, he is still holding, will be worth that many more euros so he'll be covering his loses. Does this system work? or Where is it flawed?

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Got talking to a guy yesterday who said he was telling his banker in Switzerland on Monday to convert half his cash holdings into Euros keepng the other half in pounds. The more I think about this the more confused I'm getting. His view is that if the pound tanks he'll make money on the conversion back into pounds. However if the Euro tanks his pounds, he is still holding, will be worth that many more euros so he'll be covering his loses. Does this system work? or Where is it flawed?

it's quite common as I understand it,it's hedging your bets.

.......and it does work.....the split reduces the risk should one side go wrong(which it will),

....you need to be very brave/foolhardy to depend solely on one asset to go up/down to make money.

.....if you time it right you'll make a fortune,because you have risked a lot.

...if you time it wrong,you lose your shirt.

....BTL are making the classic mistake on betting the house on property.....AND PROPERTY ALONE(that bit is important), when they don't have much REAL perception of risk.

......most people by nature are quite risk-averse,they would rather be employed by a company and have a steady wage etc.........most people dream of having a business but when it comes to the crunch,the lack of a steady income scares them.Many of the ones that do have not put enough thought into their target market,or checked out the competition....which is why so many businesses fail.

Edited by oracle

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Got talking to a guy yesterday who said he was telling his banker in Switzerland on Monday to convert half his cash holdings into Euros keepng the other half in pounds. The more I think about this the more confused I'm getting. His view is that if the pound tanks he'll make money on the conversion back into pounds. However if the Euro tanks his pounds, he is still holding, will be worth that many more euros so he'll be covering his loses. Does this system work? or Where is it flawed?

Isn' this the same as going to the bookies, and placing a bet to weather one throw of a dice results in a positive number, while also placing a bet that the result is negative?

Either result, you will end up down!

Edit: I guess this is what i'm doing with gold, if IRs go down sterling falls, gold up. IRs go up, sterling climbs, gold down - but a HPC! [well sort of].

Edited by Jason

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Isn' this the same as going to the bookies, and placing a bet to weather one throw of a dice results in a positive number, while also placing a bet that the result is negative?

Either result, you will end up down!

Edit: I guess this is what i'm doing with gold, if IRs go down sterling falls, gold up. IRs go up, sterling climbs, gold down - but a HPC! [well sort of].

Jason,

If this guy is primarily concearned with his holdings in pounds, if the pound drops he will gain more pounds when he converts the Euros back to pounds and therefore he'll end up with more pounds than he would have done otherwise. Ok I get that, that's the easy bit.If however the euro goes down then how does he make up the loss?

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Jason,

If this guy is primarily concearned with his holdings in pounds, if the pound drops he will gain more pounds when he converts the Euros back to pounds and therefore he'll end up with more pounds than he would have done otherwise. Ok I get that, that's the easy bit.If however the euro goes down then how does he make up the loss?

Maybe he is banking on the euro IR raising, plus other things like the Iranians trading oil with it next spring, which would have a positive effect.

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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