Investing to maintain pound/dollar buying power

[Vultee]

What's the best investment strategy for maintaining/ growing wealth when measured in US dollars as a UK based UK citizen? I'm currently investing via financial advisor using agressive growth Aviva Investment fundings and Vanguard Lifestrategy (only done this 2 years so far ) with intent to buy assets in america circa 5 to 10 years time (aircraft plus hangarhome) at the end of investment period

My concern is a further and sustained erosion of UK pound buying power against dollar and whether it will drop further and crucially remain at a new low (any viewpoint on this likliehood - will we ever return to 2 to 1 or 1.5 to 1?

Other than buying real estate asset in america now and possibly renting it, I'd prefer retaining liquidity (in case ambitions change) and instead some form of investment pegged to the dollar

Any guidance cheers

[anonymous-user]

Why not just convert to dollars as you go and invest in a portfolio of vanguard etf products?

Presuming the dollar to be stronger than the pound on a 10 year horizon with a reasonably fixed end point isn't a bet I would necessarily make...

[NickCQ]

Buy FTSE100 or US equity index trackers

[WindyCommon]

Buying the unhedged USD denominated share classes of the funds you are interested in is the simplest answer. Not all funds offer these, but many do - you just need to search carefully.

[JulianPH]

Vultee said:

What's the best investment strategy for maintaining/ growing wealth when measured in US dollars as a UK based UK citizen? I'm currently investing via financial advisor using agressive growth Aviva Investment fundings and Vanguard Lifestrategy (only done this 2 years so far ) with intent to buy assets in america circa 5 to 10 years time (aircraft plus hangarhome) at the end of investment period

My concern is a further and sustained erosion of UK pound buying power against dollar and whether it will drop further and crucially remain at a new low (any viewpoint on this likliehood - will we ever return to 2 to 1 or 1.5 to 1?

Other than buying real estate asset in america now and possibly renting it, I'd prefer retaining liquidity (in case ambitions change) and instead some form of investment pegged to the dollar

Any guidance cheers

The first question would be why do you wish to achieve this?

Are you planning to move to the US, or is there another reason the value of the US$ is relative/important to you?

[Vultee]

WindyCommon said:

Buying the unhedged USD denominated share classes of the funds you are interested in is the simplest answer. Not all funds offer these, but many do - you just need to search carefully.

Thanks this is exactly the sort of thing I'm looking for - whilst I do have circa 16% portfolio exposure to USA markets I'm not sure what if any are unhedged so I will investigate this further

[Vultee]

JulianPH said:

The first question would be why do you wish to achieve this?

Are you planning to move to the US, or is there another reason the value of the US$ is relative/important to you?

The reason is classic aircraft are generaly more expensive / restrictive to operate in UK and potential for crippling additional cost incurred for remediation work if transfering to CAA operation etc there are several other benefits to retaining an American built historic aircraft sourced in America as well as you may imagine. You get an intercontinental flight out there and using the 90 day visa to stay and fly your toy, this is what a few are doing I believe particularly in florida. It is one of three options I'm exploring pros cons but of course with the exchange rate dropping (it was 1.65 a few years ago when I first considered this approach to operation) it is going to get more expensive I'm keen to understand what mitigation as well as anybody has any strong feel for where exchange rate is going over the medium term

So perhaps my actual underlying question is whether we can get back to 1.5 to 1 exchange rates medium term, as I'm thinking these trade wars are here to stay for medium term and even if UK was to throw out the whole Brexit thing would our dollar exchange rate recover much or has the UK situation damaged permanently in the medium term now that we are moving into a protectionist isolationist trade environment where maybe country which has largest resources and economy comes out best?

[JulianPH]

Vultee said:

JulianPH said:

The first question would be why do you wish to achieve this?

Are you planning to move to the US, or is there another reason the value of the US$ is relative/important to you?

The reason is classic aircraft are generaly more expensive / restrictive to operate in UK and potential for crippling additional cost incurred for remediation work if transfering to CAA operation etc there are several other benefits to retaining an American built historic aircraft sourced in America as well as you may imagine. You get an intercontinental flight out there and using the 90 day visa to stay and fly your toy, this is what a few are doing I believe particularly in florida. It is one of three options I'm exploring pros cons but of course with the exchange rate dropping (it was 1.65 a few years ago when I first considered this approach to operation) it is going to get more expensive I'm keen to understand what mitigation as well as anybody has any strong feel for where exchange rate is going over the medium term

So perhaps my actual underlying question is whether we can get back to 1.5 to 1 exchange rates medium term, as I'm thinking these trade wars are here to stay for medium term and even if UK was to throw out the whole Brexit thing would our dollar exchange rate recover much or has the UK situation damaged permanently in the medium term now that we are moving into a protectionist isolationist trade environment where maybe country which has largest resources and economy comes out best?

That makes sense now!!!

Obviously no one can predict the future. Simply holding a Dollar denominated bank account may be a starting point (I am in the process of moving my banking to Hampden & Co and they offer Dollar (and Euro) accounts at a very reasonable price).

I'll have a look into Dollar denominated investment accounts for you.