So, if the pound is going to weaken,,,,,,,,,,,,

[Seti]

Reading Moneyweek and the financial press opinion seems fairly consistent that the £ is going to weaken over the next few years.

I have a sum invested in a range of unit trusts of which 50% is in the UK, the rest is mainly in the US with perhaps 15-20% split between India and South America.

Does anyone have suggestions of how to take advantage of a falling £? Investing more in funds outside of the UK? Opening up foreign currency deposit accounts?

Which currencies are going to up against it? I'm guessing the Swiss Franc and the $, possibly the Yen but not sure about the Euro (why should it?)

Any suggestions or thoughts?

[chris7676]

Moneyweek keeps repeating itself and has been known to make mistakes, more often than you would like.

On the other hand The Economist consensus is that £ is of a fair value.

It may weaken even more but it may not, most currencies are a similar kind of trash really... And why would you expect the Yen to get even stronger ?

[limpsfield]

Seti said:

Reading Moneyweek and the financial press opinion seems fairly consistent that the £ is going to weaken over the next few years.

If Moneyweek and the press is your reason for expecting weakness, I wouldn't put too much weight on them. It's already down around 5% against the USD from where it ended last year.

[longone]

my bet: £=US$ within 12months

[tuffer]

longone said:

my bet: £=US$ within 12months

And what are you basing that on? When was the last time we saw £1 = $1?

[fido]

custodian said:

The £ rate today is the best guess on its future value.

Not true, as forward pricing depends on the relative interest rates between the two countries.

[prand]

Isn't Moneyweek the financial equivalent of the Daily Mail? The same daily mail that was predicting drought and a complete failure of an Olympics in 2012?

If it grabs readers, it doesn't have to be true.

[Newc]

longone said:

my bet: £=US$ within 12months

I'll take that. What size are you after ?


Edit:
In fact, I’ll make you any size up to 10k, in escrow, on a thirteen month American expiry, ie if USD/GBP goes to 1.00 or less at any time before 28 February 2014 I’ll pay out.

Edited by Newc on Tuesday 12th February 13:19

[Fittster]

prand said:

Isn't Moneyweek the financial equivalent of the Daily Mail? The same daily mail that was predicting drought and a complete failure of an Olympics in 2012?

All magazines in that class are (Investors Chronicle, Shares and Moneyweek). Reading any of them isn't going to make you rich. Considering that professional investors can't actually outperform the market, why do you think a couple of quid magazine's tips are going to be useful.

Alternatively you can look worthy and think you have useful opinions by reading the Economist.

[AntonyMark]

I have been reading Moneyweek for a few years now and it is starting to sound like an old record and same old same old every 6 months. Same stuff reappears every few months in different wrapper.
A few good ideas and opinions but at the end of the day it has to fill out the mag every week with content and grab your attention.
Read as many as you can and make up your own mind with as much data as you have time to accumulate..
regards

AntonyMark

[Fittster]

AntonyMark said:

I have been reading Moneyweek for a few years now and it is starting to sound like an old record and same old same old every 6 months. Same stuff reappears every few months in different wrapper.
A few good ideas and opinions but at the end of the day it has to fill out the mag every week with content and grab your attention.
Read as many as you can and make up your own mind with as much data as you have time to accumulate..
regards

AntonyMark

I don't think that's totally fair criticism. I think Moneyweek have been banging on about three major investing themes for a long period of time.

1. Buy gold due to central bank money printing. If you started buying gold a few years ago you'd have done well. Banks are still printing so the logic is still there even if some of the rewards have probably gone.

1. Buy Japan because it's cheap. Japan has shown some signs of life recently and other people are tipping it. So not an unreasonable investing theme.

1. Buy Blue Chips

On top of those they have the usual type of weekly share tips that you'd fine in pretty much any other high street magazine on investing. I guess the problem is the same for anyone producing a weekly periodical, the financial world doesn't really change that much from week to week but they can't just write, "last week we said frozen orange juice is cheap buy it, this week it's still cheap buy some more." It would be difficult not to recycle content if the logic behind the original article still stands.

I'd rather an financial advice remained consistent than flip-flopped between different investments.

[jeff m2]

Seti said:

Reading Moneyweek and the financial press opinion seems fairly consistent that the £ is going to weaken over the next few years.

I have a sum invested in a range of unit trusts of which 50% is in the UK, the rest is mainly in the US with perhaps 15-20% split between India and South America.

Does anyone have suggestions of how to take advantage of a falling £? Investing more in funds outside of the UK? Opening up foreign currency deposit accounts?

Which currencies are going to up against it? I'm guessing the Swiss Franc and the $, possibly the Yen but not sure about the Euro (why should it?)

Any suggestions or thoughts?

I think your reasoning is sound, the Pound has recently fallen from 1.62 to 1.56 so you should already have seen good returns from your US equity.
India is currently getting more foreign money and Brazil is improving.

One thing I would check is that a large portion of your UK equity is Large Cap with foreign earnings, that way you benefit from any further losses in Sterling.

Currency hedging.....many ways to do it, I personally prefer equity or bond investment in the better regions (I'm not adventurous)
So currently that would be European or Japan equity. (As emerging market bonds are not going to do what they did over the last two years)

[longone]

tuffer said:

longone said:

my bet: £=US$ within 12months

And what are you basing that on? When was the last time we saw £1 = $1?

Last time and only time was 1985, but I'm not basing my bet on the past so much as the future. By 2015 the £ will we be challenged through its SDR composition. I think the market will factor that and the general situation in UK.

[chris7676]

longone said:

the £ will we be challenged through its SDR composition.

What is the SDR composition ?

[jeff m2]

chris7676 said:

longone said:

the £ will we be challenged through its SDR composition.

What is the SDR composition ?

Money from major currencies.
Some countries would like to the composition changed and their currencies included which would create downward pressure on sterling.
I think that's it..feel free to comment.

With regard to 1:1 with the Dollar, I think not.

[longone]

chris7676 said:

longone said:

the £ will we be challenged through its SDR composition.

What is the SDR composition ?

Wikipedia explains it but £ is currently 11% SDR.
It expires 2015 and China has no current presence. People much smarter than me think that's unsustainable going forward. Figures for the £ of 3% SDR or better zero are forecast post 2015. We are are a little bankrupt island that's been tolerated at that table for too long (in my opinion!). The world won't end but I think the £ will fall very hard. If that happens a lot of £s will come home and you can fill the rest in.

[chris7676]

longone said:

Wikipedia explains it but £ is currently 11% SDR.
It expires 2015 and China has no current presence. People much smarter than me think that's unsustainable going forward. Figures for the £ of 3% SDR or better zero are forecast post 2015. We are are a little bankrupt island that's been tolerated at that table for too long (in my opinion!). The world won't end but I think the £ will fall very hard. If that happens a lot of £s will come home and you can fill the rest in.

Interesting. But what about strong currencies such as AUD or even a small country such as NZD ? Is there any historical evidence that changes in the SDR regarding any currency influenced the its exchange rate ?

[longone]

chris7676 said:

longone said:

Wikipedia explains it but £ is currently 11% SDR.
It expires 2015 and China has no current presence. People much smarter than me think that's unsustainable going forward. Figures for the £ of 3% SDR or better zero are forecast post 2015. We are are a little bankrupt island that's been tolerated at that table for too long (in my opinion!). The world won't end but I think the £ will fall very hard. If that happens a lot of £s will come home and you can fill the rest in.

Interesting. But what about strong currencies such as AUD or even a small country such as NZD ? Is there any historical evidence that changes in the SDR regarding any currency influenced the its exchange rate ?

That's a fair point too, but considering any other country's claim to SDR involvement only threatens the UK's exisiting membership. SDR supports foreign currency reserves and loosing it because others have a stronger claim is not good, at least in the short term.
My opinion is that the UK's memebership is a legacy issue, it dates back to when it was reasonable to consider the £ as a minor reserve currency, to be grouped together with others and the US$. I think the case for that is substancially weaker today.
The case for including China and or others is much stronger and a significant drop in the £ would follow.

[Seti]

http://www.telegraph.co.uk/finance/currency/987742...

[bad company]

longone said:

my bet: £=US$ within 12months

Would you be prepared to place a bet on that?