Buy Euros to hedge against no-deal Brexit GBP crash?

dunstonh

It should also be noted that Europe is also damaged by a no-deal scenario.  So, it will be two currencies going down.   So, the logical alternative would not be something in Euros but dollars.

MinuteNoodles

backgroundmom said:

Thanks for all your advice, it's very helpful.  In answer to your question about buying a house in Euroland, it would be as retirement home/second home and because I want to live in that country, not a financial decision.

Then if you want one now then buy now. The pound is still quite low against the Euro compared to previous years. At the moment you'll find it's much easier to do whilst we're kind of still in the EU. Might be much harder to buy if we have a hard Brexit and there could be increased costs which could wipe out any benefit of a change of exchange rate.

steampowered

Yes, because most of my investments are held in globally diversified funds. That's how most people invest and is probably how your pension is invested.

Most people will advise diversifying investments across multiple sectors and geographies rather than investing only in (for example) a FTSE 100 or FTSE 250 tracker.

Diplodicus

Trying to mitigate the damage of no-deal Brexit is certainly a legitimate concern. The Leave vote overnight made £ holders poorer  in the world and a no-deal exit at the end of the year would be a lose/lose game with a difference: the loss on the other side of the Channel would be cushioned between 26 countries.

You could buy into a fund invested in stocks abroad maybe. 

backgroundmom

MinuteNoodles said:

backgroundmom said:

Thanks for all your advice, it's very helpful.  In answer to your question about buying a house in Euroland, it would be as retirement home/second home and because I want to live in that country, not a financial decision.

Then if you want one now then buy now. The pound is still quite low against the Euro compared to previous years. At the moment you'll find it's much easier to do whilst we're kind of still in the EU. Might be much harder to buy if we have a hard Brexit and there could be increased costs which could wipe out any benefit of a change of exchange rate.

Yes!  Needs to be by end of Summer really which may be tricky!

mooneysaver

I think gold or shares in gold mining companies might be a more appropriate hedge as it will also likely go up in value if the pound crashes, but if we secure a deal with the EU the value of gold is also likely to rise.

Voyager2002

mooneysaver said:

I think gold or shares in gold mining companies might be a more appropriate hedge as it will also likely go up in value if the pound crashes, but if we secure a deal with the EU the value of gold is also likely to rise.

While that is your view, most informed people would regard that as very bad advice. I for one do not agree.

bowlhead99

mooneysaver said:

, but if we secure a deal with the EU the value of gold is also likely to rise.

Wat

backgroundmom

So the recommended investment strategy is non-European equities?

EdGasketTheSecond

No not if you are buying a house soon which you say you are. You are just going to have to find your house and exchange £ for euros when you think the rate looks alright; it is obviously not as good now as it was but could go either way. Don't gamble on shares with your house funds.

As a side note; my friend has a second home in France which he can't get to due to lockdown and quarantine measures. In fact it has become an expensive chore trying to travel between his UK and French property so think carefully about it.