Euro vs. pound speculation?

rockhopper_3

Dear All

Was hoping for some advice from all you clever people....

Rather by luck than judgement, we happened to invest our savings in Europe about 18 months ago, which at the time meant for every pound we put in we got 1.45 Euros. Obviously, we have been pretty happy about the way things have been going with the exchange, and have been talking about taking the money out and converting it back to pounds giving us a tidy profit. It seems we have missed the "low" in December of 1.02, and it looks as though things are creeping back the other way....

However, we are completely inexperienced in these things. Do we panic now and whip the money out at the current level of 1.12, or do we wait and see if things go more towards 1 to 1 again, risking profit margins?

We understand that no-one can know for sure and obviously wouldn't hold anyone responsible, but we were just wondering - if this was you, what would you do?

Many thanks in anticipation,
Rocky and Mr Rocky

Hungerdunger

How bad would you feel if you changed them now and made a tidy profit, but a few weeks later the rate went to parity?

How bad would you feel if you waited for the rate to improve, but after six months it had got worse?

I'd go for the one which makes you feel less bad.

bitterSTAR

The only thing you can 100 % gurantee is the current exchange rate, and if in 6 months time it turns out you made the wrong decision then you will just have to remind yourself that it's impossible for anyone to predict the future.

Nagiw

I agree with the other posters. Why not take your profits now.
In my (totally amateurish) opinion the pound/euro rate is about right at 1.10, but the more the government keep spending on banks and other whims, the lower the pound is likely to go. So there's a chance you may not have missed the low yet, but, if Gordon's gambles work, the pound could fly!

shown73

Confucious say, "Bird in the hand, worth two in the bush." If you do happen to find a foolproof way of predicting the exchange rate, I trust you will share it with us!

Cook_County

You may also want to plan the tax position on the capital gain to minimise the UK tax you owe. Therefore you may choose to leave some gains until after April 5th.

rockhopper_3

Thank you all for your words. Such a hard decision!

Cook_County: would be very grateful if you wouldn't mind saying a little more - as I said before we're a bit clueless! We didn't realise we would have to pay any tax as the profit we have made is not from gaining interest....please can you explain? How would the date make any difference?

Many thanks again