Safe currencies as a hedge against the plummeting pound..?

[ftb_fml]

We all know how much of a shoeing our currency has taken since the Brexit vote, and personally I think it's inevitable that it will continue to nose-dive in the run up to, and aftermath of the forecast Brexit deadline in October. As usual I'm late to the party considering it's already lost maybe 30% against the Euro from the most recent peak, however I'm considering some foreign currency in an effort to stem the losses somewhat.

The obvious choice is Euros; the dollar makes me jittery as I think the yank economy is similar screwed to ours; plus the fed seems to have stopped their planned rate hikes in their tracks. Any other currencies worth considering? Something outside the Euro zone perhaps; Swiss francs maybe?

I'd be interested to hear the thoughts of other HPC-ers on this subject

 

[longgone]

suck it up 

 

it will go back up eventually 

[Locke]

18 minutes ago, longgone said:

suck it up 

 

it will go back up eventually 

HAHAHA

 

There are no safe Fiat currencies.  If a group of guys jump out of a plane without chutes, they are all dead. Just because some fall a bit slower than the others, doesn't make them less dead.

 

The only safe stores of wealth are precious metals and some cryptocurrencies (maybe). If you want a return, you will have to do research and find out which businesses are value rather than sentiment based.

[Captain Kirk]

You could buy options that expire after November. Either a put option on GBP/XXX or a call on XXX/GBP. where XXX is the EUR or USD, etc.

[jiltedjen]

58 minutes ago, ftb_fml said:

We all know how much of a shoeing our currency has taken since the Brexit vote, and personally I think it's inevitable that it will continue to nose-dive in the run up to, and aftermath of the forecast Brexit deadline in October. As usual I'm late to the party considering it's already lost maybe 30% against the Euro from the most recent peak, however I'm considering some foreign currency in an effort to stem the losses somewhat.

The obvious choice is Euros; the dollar makes me jittery as I think the yank economy is similar screwed to ours; plus the fed seems to have stopped their planned rate hikes in their tracks. Any other currencies worth considering? Something outside the Euro zone perhaps; Swiss francs maybe?

I'd be interested to hear the thoughts of other HPC-ers on this subject

 

bit late to be asking sadly! 

Thats why people hold gold and bitcoin while stocks are rocketing, its a hedge. Might not yet be at a low in sterling but it will probably recover a bit, buying other currency right now could be a poor choice as you may find you have more sterling purchasing power next year, you would be locking in a loss right now

[Fatmanfilms]

There is a reason people buy & hold equities for the long term, cash is something for short term expenditure nothing else.

www.fundsmith.co.uk has returned 

YTD 30.75% 1 month 5.52%, 3 months 10.94% 6 months 25.41% 1 year 21.82% 3 years 69.44% 5 years 183.44%

[dugsbody]

Global tracker funds, but only for long term. Otherwise there are global bond ETFs available.

[scottbeard]

3 hours ago, longgone said:

suck it up  

That’s certainly my approach.  I took no action when it fell from 1.6 euros in 2000 to 1.0 in 2009, so I’m not minded to take action now it’s gone from 1.4 in 2016 to 1.1 in 2019. 

As as others have said, in the long run ALL fiat currencies lose value so long term saving should be in real assets of some sort. 

[Fishfinger]

Gold is at it's all time high in GBP terms at the moment.

I suspect it will go a lot higher up to 31st October so probably the best currency to be in. 

[GreenDevil]

3 hours ago, Fatmanfilms said:

There is a reason people buy & hold equities for the long term, cash is something for short term expenditure nothing else.

www.fundsmith.co.uk has returned 

YTD 30.75% 1 month 5.52%, 3 months 10.94% 6 months 25.41% 1 year 21.82% 3 years 69.44% 5 years 183.44%

Most of that fund 65% is invested in the US. So I think a large proportion of the gain over the last few years has been sterling's slide. Interesting though. 

Edited August 5, 2019 by GreenDevil

[GreenDevil]

17 minutes ago, scottbeard said:

That’s certainly my approach.  I took no action when it fell from 1.6 euros in 2000 to 1.0 in 2009, so I’m not minded to take action now it’s gone from 1.4 in 2016 to 1.1 in 2019. 

As as others have said, in the long run ALL fiat currencies lose value so long term saving should be in real assets of some sort. 

Bricks n mortar. Its the only asset 100% guaranteed to go up. And with 100% backing from UK gov and UK central bankers a bumper bonus from a prop is guaranteed every year. This year will be stamp duty gift! 

Edited August 5, 2019 by GreenDevil

[Captain Kirk]

4 hours ago, Fatmanfilms said:

There is a reason people buy & hold equities for the long term, cash is something for short term expenditure nothing else.

www.fundsmith.co.uk has returned 

YTD 30.75% 1 month 5.52%, 3 months 10.94% 6 months 25.41% 1 year 21.82% 3 years 69.44% 5 years 183.44%

That's great if you pick the right fund. Those who chose Woodford's fund would not be so happy. Some of Fundsmith's 'success' would be the 'luck' of Brexit along with the BoE making wrong decisions based on wrong forecasts.

By saying this, I'm not saying you should keep all your wealth in cash and not diversify.

[longgone]

11 hours ago, Locke said:

HAHAHA

 

There are no safe Fiat currencies. 

indeed all my cash is allocated for housing  future earnings when i get back on track will need to be thought about. 

its been sat in banks for over 10 years so not that bothered now. 

8 hours ago, scottbeard said:

That’s certainly my approach.  I took no action when it fell from 1.6 euros in 2000 to 1.0 in 2009, so I’m not minded to take action now it’s gone from 1.4 in 2016 to 1.1 in 2019. 

As as others have said, in the long run ALL fiat currencies lose value so long term saving should be in real assets of some sort. 

i remember over 2 dollars to the pound back in early 00`s  new york was cheap. 

To be honest i am beyond caring about it  hasty decisions can be someones permanent undoing. 

[nightowl]

The Pound has been in a long term slide since the financial crash 10 years ago, so blaming Brexit isn't wise as it clouds any judgement as to what's driving this.

[winkie]

4 minutes ago, nightowl said:

The Pound has been in a long term slide since the financial crash 10 years ago, so blaming Brexit isn't wise as it clouds any judgement as to what's driving this.

Not exactly:

[zugzwang]

German factory order are up 2.5% month-on-month. Buy the euro!

 

GBPEUR:CUR

GBP-EUR X-RATE

1.0864EUR

+0.0025+0.23%

 

[nightowl]

12 minutes ago, winkie said:

Not exactly:

Ok maybe not as long ago as 10 years, but even so since 2013/14 its been a steeper downhill than the gentle decline before this.....2016 dips on the referendum the 2018 shows a post Brexit rally then back to trend to me.  I assume too low a BofE interest rate are undermining it.

Edited August 6, 2019 by nightowl

[Gribble]

Sterling is still 20-30% overvalued against the Euro. 

Predominantly it is about PPP.  A rail ticket for a 45 min train journey cost me equivalent to  £1.75 and 2.10 in Spain and Germany respectively The trians were clean and reliable and not overcrowded.. And look at property prices and what you can get for your cash in those countries.

I have been following the DM/Euro FX market since the 70s. Currencies do no revert ot a long term figure but move in  trends often long term decade trends.

UK and US economies built on BS.

So precious metals or Euro

 

 

 

 

[Mikhail Liebenstein]

On 05/08/2019 at 13:21, jiltedjen said:

bit late to be asking sadly! 

Thats why people hold gold and bitcoin while stocks are rocketing, its a hedge. Might not yet be at a low in sterling but it will probably recover a bit, buying other currency right now could be a poor choice as you may find you have more sterling purchasing power next year, you would be locking in a loss right now

Yes, Gold has been awesome, though I've probably been underweight. I've got 8 Oz Physical in a safe just in case, and the rest with Gold Money, so probably 20 Oz total. 

I've also got 20,000 XRP and bunch of other Crypto. 

This probably isn't diverse enough, as most of my wealth is in the house and my pension fund, so really Gold and Crypto is still less than 1%, though a bigger share of my liquid assets. 

[SOLZHENITSYN]

22 hours ago, winkie said:

Not exactly:

GBP is fooked. No one ever seems to talk about the LONG term trend. Britain is a nation in decline, there is less and less demand for its currency. The BofE should have rates at around 3% by now, but refuse to because they want to maintain the illusion of wealth for a deluded generation of baby boomers!

https://www.macrotrends.net/2549/pound-dollar-exchange-rate-historical-chart

 

[scottbeard]

4 hours ago, SOLZHENITSYN said:

GBP is fooked. No one ever seems to talk about the LONG term trend. Britain is a nation in decline, there is less and less demand for its currency. The BofE should have rates at around 3% by now, but refuse to because they want to maintain the illusion of wealth for a deluded generation of baby boomers!

There isn't a single, "long term trend".  Britain was really struggling in the 70s and early 80s, hence the decline there.

Then for the 30 years from 1985 to 2015 there wasn't a downward trend - it fluctuated around a similar level.  During that period the UK and US were, by and large, performing similarly.

Recently there's been a downtick because Brexit is a rubbish idea from an economic perspective.

What you're seeing on that chart is three distinct periods of history, not a single long term story.

[dirtyduck]

1 hour ago, scottbeard said:

There isn't a single, "long term trend".  Britain was really struggling in the 70s and early 80s, hence the decline there.

Then for the 30 years from 1985 to 2015 there wasn't a downward trend - it fluctuated around a similar level.  During that period the UK and US were, by and large, performing similarly.

Recently there's been a downtick because Brexit is a rubbish idea from an economic perspective.

What you're seeing on that chart is three distinct periods of history, not a single long term story.

yes thanks, cleared that up for me too. 

On the theme of a no deal brexit, then we would have the option of offering a 20% tax to companies setting up (like Irland after their crash).  On that basis , id imagine the pound looking a lot more rosy - ofc the plebs would have crappy workers rights and zero hour contracts.  EU is at least genarally pretty good at protecting workers rights.

The problem with these big spikes down is that can force you to make a move and screw yourself. 

[dugsbody]

On 06/08/2019 at 08:50, nightowl said:

The Pound has been in a long term slide since the financial crash 10 years ago, so blaming Brexit isn't wise as it clouds any judgement as to what's driving this.

The Pound was on the rise before the referendum It started to downtrend leading into the vote then fell precipitously after.

The brexit vote caused the Pound to lose about 20-30% of it's value.

[gp_]

Long term changes in exchange rates do not tell you much about an economy anyway.

The EU is not that good about protecting workers rights: it has done nothing about zero hours contracts.

Lower EU immigration means fewer zero hours contracts and higher wages for the low paid. Its already happened on the threat of leaving, and actually leaving will mean more so. The "plebs" do very well out of leave.

 

 

[dirtyduck]

11 minutes ago, gp_ said:

Long term changes in exchange rates do not tell you much about an economy anyway.

The EU is not that good about protecting workers rights: it has done nothing about zero hours contracts.

Lower EU immigration means fewer zero hours contracts and higher wages for the low paid. Its already happened on the threat of leaving, and actually leaving will mean more so. The "plebs" do very well out of leave.

 

 

Im in Germany right now and workers rights are pretty good. I guess whatever the EU rights are , they will be better than the US or whatever is laid upon us from the UK Gov

Lower EU migration = Higher Commonwealth migration