Doing anything to protect savings during Brexit?

dgerrard

So, I'm seeing multiple dialogues online at the moment:
People saying "the pound is going to crash on 1st Jan"
People saying "currency trading is a great way to lose a lot of money, unless you're working in hundreds of thousands or more"
People saying "it's sick how the rich will be making money off of Brexit"

I have nowhere near the amount of cash for things to really become an issue either way, but:
I've got £20000 in movable savings

I have duel citizenship with Canada, and a Canadian bank account

Is there anything I should be doing in the next week, to protect my savings or even turn a mild profit?  Or is it best to just leave things as-is and see what happens?

JohnWinder

If you're talking about currency movements no one you and I know or writes for the public can know, but that doesn't stop people guessing.

Some of them might make money from your currency conversions, or need to get readers so their advertisers keep advertising with them, but neither of those help you.

Have a look at how good the experts have been predicting bond yields: https://theirrelevantinvestor.com/2019/06/12/more-art-than-science/   Not just wrong, but generally in the wrong direction.

Here's currency prediction: https://www.svb.com/blogs/ivan-asensio/how-currency-movements-can-affect-your-global-business

The only things you can know are what fees you'll pay if you don't just leave things, the buy/sell spread you'll suffer and the opportunity costs you'll incur. And if you choose to 'do something' and get it right, you then have to do something else to get back to your preferred state, and get that timing right as well. It's not enough to know when to buy or sell, you need to know when to sell or buy.

masonic

If this is money you intend to spend in the next few years, or is your emergency fund, then you should not take risks with it and it should be held in the currency in which you intend to spend it. If it is money that you don't plan to spend for 10+ years, then you could consider investing some or all of it, not in foreign currency, but rather in mainstream investment funds.

Albermarle

There have been other threads on the same subject.
Best way to protect £50,000 - convert to Euros pre-Brexit? — MoneySavingExpert Forum
People saying "the pound is going to crash on 1st Jan"
This shows a fundamental misunderstanding of the  currency movements.
If  a no deal is announced , or even expected to be announced , the Pound will drop immediately and not wait for Jan 1st  
If a deal is announced it will rise immediately .

MaxiRobriguez

The money in your bank will be £20,000 regardless of whether there is a deal or not after January. 

If you want to try and speculate and make a profit there are multiple ways of doing so, but that sort of goes against the purpose of a savings account. If you're speculating, you're putting your capital at risk.

To be frank, you've already missed many opportunities to hold foreign currency whilst GBP has fallen for the last 20 years. Now won't make any difference.

dunstonh

People saying "the pound is going to crash on 1st Jan"
People saying "currency trading is a great way to lose a lot of money, unless you're working in hundreds of thousands or more"
People saying "it's sick how the rich will be making money off of Brexit"

1 - a no deal will see it initially fall.  Maybe not crash in the correct sense.  A deal will see it rise.   
2 - they are largely correct.  Currency speculation is very difficult to turn a profit at low level.
3 - Most investors on this forum have done very well out of it.   Investments on global assets have had extra growth since 2016 due to the fall in sterling.  Only UK equity has had a drag because of it but luckily, UK investors tend to be more outward looking and don't have the home degree of home bias as say the US.

Is there anything I should be doing in the next week, to protect my savings or even turn a mild profit? 

Your savings are protected.  They will be worth the same as they were in Sterling whatever happens.

IvanOpinion

dgerrard said:

So, I'm seeing multiple dialogues online at the moment:
People saying "the pound is going to crash on 1st Jan"
People saying "currency trading is a great way to lose a lot of money, unless you're working in hundreds of thousands or more"
People saying "it's sick how the rich will be making money off of Brexit"

You missed one (although I suspect this won't appear until Jan 1st) - people saying 'The sky didn't fall in and the world didn't come to an end'.  Guaranteed to be written by a brexit supporter who claims a remainer said it (spoiler alert: they are lying, only brexiteers have ever suggested such things).

Another_Saver

dgerrard said:

So, I'm seeing multiple dialogues online at the moment:
People saying "the pound is going to crash on 1st Jan"

Is it ironic that I only hear this from people who voted for Brexit?

People saying "currency trading is a great way to lose a lot of money, unless you're working in hundreds of thousands or more"

The first part is true, and still true for larger amounts, but they tend to be professionals doing it full-time and less bad at it,or the few clever enough to actually profit from providing liquidity to currency markets.

People saying "it's sick how the rich will be making money off of Brexit"
Brexit was funded by a small number of rich people shorting the UK and facilitated by a group of hackers as a practice run to get Trump in the White House, so it's not true in general that Brexit will necessarily widen the wealth/income gap, though it tends to be times of economic distress that the gap widens. I'm waiting for some more data/research on this to come out but I suspect Covid has done an excellent job in that regard as home workers have tended to be less at risk from the virus and more economically secure, and physical workers (those who need to turn up at a workplace, not necessarily manual/physical jobs) have tended to be more at risk and less economically secure (for an extreme example think Waiter vs Big 4 consultant being paid £50k a day to manage the test and trace spreadsheet), and that's before getting onto the beautifully managed igorance of the self-emloyed. It's been a classic British !!!!!!-up even the writers of Yes, Minister couldn't have made up.

I have nowhere near the amount of cash for things to really become an issue either way, but:
I've got £20000 in movable savings

I have duel citizenship with Canada, and a Canadian bank account

Is there anything I should be doing in the next week, to protect my savings or even turn a mild profit?  Or is it best to just leave things as-is and see what happens?

The below ought to be interesting...

steampowered

It's a bit late to be taking protective action I'm afraid. Brexit has already seen the pound drop dramatically against the dollar. Investors have already priced in the effect of Brexit. Not much you can do about it now.

eskbanker

steampowered said:

Brexit has already seen the pound drop dramatically against the dollar.

Except it hasn't - while it was in $1.40-1.50 territory back in H1 2016 ahead of the vote, its current $1.35 level is its highest for over 2.5 years....

Albermarle

eskbanker said:

steampowered said:

Brexit has already seen the pound drop dramatically against the dollar.

Except it hasn't - while it was in $1.40-1.50 territory back in H1 2016 ahead of the vote, its current $1.35 level is its highest for over 2.5 years....

Interesting,  as against the Euro the Pound is still around 25% down compared to its pre referendum value, and at just over €1.10 it is at the lower end of the range it has bobbed around for the last three years. Similar for Pound/Yen.