Savings in euros or dollars to protect against £ currency crash?

ruthcain1

I am a newbie on here so please don't crucify me for my ignorance.

I am expecting not much good to come of Brexit given the shambles we are currently facing. I expect no deal and a slow-to-no recovery. If I am wrong, no one will be more pleased than me. I'm planning to try to locate my grandad's Irish birth certificate (lost a while back) and clear out of here to Ireland at some point, but my health isn't great and I'm too young and unpensioned to retire comfortably right now. So for now I am here but want in some way to hedge against the financial horrors I tend to see coming at the hands of our utter shower of a government and whatever may be coming next

So I would really appreciate some advice in how best to invest against the coming (further) collapse of the pound. I will have some savings to invest by November ish and was wondering which of the following options is best:
1. current account held in euros (i would transfer a few over from £ but would ultimately be hoping to generate euro income somehow- don't ask how yet)
2. the same but in dollars
3. invest in £ but in a fund which is EU/US/Asia based (please don't take the !!!! because I don't know where best in the world to invest right now... I just don't and am no economist)

Any further advice on how to invest in Ireland would be helpful. I've been advised to look for property around the Trump Golf course at Doonbeg and airbnb it to American tourists!!

missile

I thought about doing it some time ago, but did not.

ruthcain1

were you thinking of one particular option? I'm erring in favour of a small current account with a euro 'float' in it and just putting the rest in funds which get their value from the dollar. I already have a couple of these (a rather random three way split of American and Asian medium risk funds) so could just add to them. They are doing OK at the moment but presumably that's because the market is very high and everything looks alright to the inexperienced investor.

Gary_Gibson

I'm thinking along similar lines and wondering what to do.

I already live abroad - in the Far East - but all my work is freelance and done online for companies back in the UK: as a result of which, all my income currently goes into a UK current account from which I make occasional withdrawals so I have money to live on. Over time I've amassed enough savings I could keep going for at least a year without working at all if need be, but only if the £ retains its current value.

I've been pondering whether the smart thing to do is to move as much of it as possible to an account here that's not in £. Like the original poster, I don't really know much about how banking works. Mostly I just want to make sure my money doesn't lose much of it's value in the coming months so I still have something to live on.

System

You are all better informed than the currency market? Markets are forward looking and they know that Brexit is going to happen. The pound fell in June 2016 after the referendum so you are two years too late.

Cornucopia

There are two reasons for hedging against currency falls - one sensible, one not.

If you have credible future plans to move to a location outside the UK, such that the bulk of your future spending will be in a currency other than UK£, then it could make sense to move some funds into that currency now, if you have a relatively cheap and easy way to do it, and the funds in the other currency will be secure and properly invested.

If this is simply about hedging for a better future life in the UK, then I agree with Economic, that this is as risky as any other kind of currency speculation.

Alexland

Currency markets have already had 2 years to price in most likely sceanrios and probably a bit more given the normal market over reaction to politics and uncertainty. As such moving cash into foreign currencies would be a strong bet that actual result is significantly worse than people generally already expect.

Personally my view is that the real risk to UK investors is that some kind of way forward is agreed and the pound starts strengthining again causing the pound value of overseas assets to drop which would reverse a lot of the stock market gains UK investors have seen recently.

Alex

ruthcain1

thankyou. I did wonder about the issue of built in losses/ uncertainties. And yes it would have indeed been great to have these insights on 22 June 2016. But c'est la vie.

ruthcain1

thankyou. Yes, I am planning to move to Ireland. Otherwise, I wouldn't consider it worthwhile.

Masomnia

The main problem is that you will lose 2 - 3% in fees/spread when you change into Euros, and if you were to change it back you'd lose a further 2 - 3%; so you would need GBP to fall significantly (ie to the lowest it has ever been) before you break even, never mind benefit. If a deal is done for a transition in the next 6 months you could really lose out. Interest rates are also substantially lower in Ireland so there is a cost there relative to holding cash in sterling, perhaps even more so if the Base rate does rise tomorrow.

If you're definitely moving over there it might make sense to move money over in batches to smooth out the currency fluctuations.

Investing in assets that are Europe based sounds more of a go-er to me if that's what you're thinking, but even then most income (70%+) into the FTSE100 is from abroad, and the falling £ makes UK shares cheaper abroad hence UK shares are still high despite a lower £. Might be best with just a diversified portfolio.

EachPenny

ruthcain1 wrote: »

...I'm planning to try to locate my grandad's Irish birth certificate (lost a while back) and clear out of here to Ireland at some point, but my health isn't great and I'm too young and unpensioned to retire comfortably right now.

ruthcain1 wrote: »

thankyou. Yes, I am planning to move to Ireland. Otherwise, I wouldn't consider it worthwhile.

If you haven't already then you might want to check how the condition(s) you have will be dealt with by the healthcare system in RoI. Some people have to pay for services which would be provided for free by the UK NHS.
Those costs could wipe out any economic benefit of leaving the UK.