100k to invest

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portman

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Hi

I have 100k to invest and was looking for advice based on my situation.

I am in my early 30's have no pension, no mortgage and no dependants. I believe that the euro will continue to lose value over the next year against all major currencies and that we are entering into a deeper recession. I hope to invest this money for the long term and my first priority is to protect the value, however I am not completely risk averse and would like to see a good return.

My original idea was to spread the money into a number of different currencies particularly the Canadian dollar, Australian dollar, US Dollar, Swiss Franc and Sterling. Though by doing this I wont be allowing myself much return on the investment.

cheers

portman
 
Your idea is based on what strategy?

Putting it into different currencies like that seems like a random throw of the dice not an investment.

Would suggest having clear clear goals and get good advice.
 
Currency speculation is very hard to do and highly volatile.

Most assets concern only one independent variable v the price.

With currencies you are playing two independent variables against one another. Hence the huge volatility.

Currency plays are more a short term trade than a long term investment IMO.

Also all currencies are going to fall in value (purchasing power) over the longer term due to inflation.

IMO for the long term investor (10 years+) one is better off in a diversified portfolio of equities with some bonds (but not Western government!) and a small allocation to property, commodities and other uncorrelated returns (i.e. timber).

Diversify, diversify, diversify unlesss you have a Buffett grasp on investing.

Personally I would get some independent advice before 'playing' the currency markets...
 
Alot of advisors now recommend the Canadian dollar although very difficult when there's no bank located here - easiest opton is Sterling for us but that's as unsteady as Euro.

You might be better off looking at Gold
 
HI,

Efficient-market research conducted on exchange rates found the same random walk phenomenon as found in the stock market. Exchange rates move unpredictably. Currency exposure tends to increase the volatility of a portfolio and this is especially true in the bond markets.

While there is no reliable evidence to suggest that the expected return of exchange rates (assuming monies are invested in short-term currency deposits) is generally anything other than zero.

Generally, investors pursue global portfolios in order to diversify. Statistically, diversification should result in a lower portfolio volatility due to the combination of uncorrelated assets. If volatility is increased with the addition of global assets through currency risk, the whole purpose of international diversification is defeated.

To test this, we created an equally weighted portfolio of 12 currencies from 1970 to March 2010 and compared the performance of this with US Treasury Bills and Government Bonds.

The average annual return for the currency portfolio was typically around 1.45%pa compared to 5.66%pa for Treasury Bills and 8.63%%pa for Bonds.This lends support to the notion that investing in currencies carries risk but not the expecation of a positive return.

The results can be found [broken link removed]
 
Horatio said:
If I had a 100k to invest I'd buy 5 year saving certificates from An Post.
Click to expand...

Buy good quality agricultural land nearish to a good provincial town. The one thing that cannot be made, and will never be in over supply. Let it for a yearly income. Prices well down now.
 
Just to throw the tax angle in on the currency speculation. This would be subject to CGT (currently 25% tax). There has been some speculation following the Commission on Taxation report that we may have higher CGT rates in years to come. You should always remember to consider tax in performing an investment appraisal. Some assets deliver tax free returns
Kieran Coughlan, Tax Manager CXC
 
Portman - I can provide investment advice for people in your position so if you want to explore options then just google me and you find the site and an email address for me. Be warned, however, that I am fee-based so it costs to see me. The plus side is that I am not a product seller.
 
Hi Portman,

Firstly congratulations on having 100K to invest, given the current economic conditions, cash is indeed King!!

OK to invest you require most of your money to bring in a steady ROI every year, it is your base so to speak on which to invest into riskier investments.

1. Invest 35% (35K) into short term 2-4 year corporate bonds.

2. Invest 35% (35K) into blue-chip dividend stocks such as Abbot, Exxon-Mobil, McDonalds, Microsoft, Johnson & Johnson etc..

3. Invest 10% (10K) into physical gold or Perth Mint Certificates...try to stay away from Gold ETFs...Also consider silver too..

4. Invest 10% (10K) into commodities & Spread trading - Risky but with good trailing stops you can limit risk and gain good returns too..

5. Inverst final 10% (10K) in Foreign cash (not Fx) but into the Krone, Yen...Check everbank for these currency accounts..

All in all 10% of your 100K is in very risky investments...

Some final thoughts...

Use a US based stock/commodity brokers...cheaper and easier to access than Irish/UK brokers...

Use 4-5% per investment and keep tight stop losses...

Best of luck,

IronDimer68
 
ringledman said:
IMO for the long term investor (10 years+) one is better off in a diversified portfolio of equities with some bonds (but not Western government!) and a small allocation to property, commodities and other uncorrelated returns (i.e. timber).
Click to expand...

I’d go along with ringledman’s advice (post #3).

As you presumably want capital growth and not income at this stage, I’d pass up on the bonds (except perhaps for foreign government bonds, as these have a low correlation with euro equities). You should look initially at asset classes and not at particular investment products: e.g. euro-denominated equities; foreign developed market equities (e.g. FTSE100 / S&P500); emerging market equities; commodities (i.e. commodity futures via an ETF, as the roll yield is uncorrelated with equities), timber; property (small allocation); foreign government bonds (very small allocation). Note if you don’t have a pension, you should investigate investing via a pension for tax relief on contributions. [Disclaimer: The above is comment / observation and is not a recommendation to follow any particular investment strategy or to buy / not buy any particular fund or stock.]
 
portman said:
Hi

I have 100k to invest and was looking for advice based on my situation.

I am in my early 30's have no pension, no mortgage and no dependants. I believe that the euro will continue to lose value over the next year against all major currencies and that we are entering into a deeper recession. I hope to invest this money for the long term and my first priority is to protect the value, however I am not completely risk averse and would like to see a good return.

My original idea was to spread the money into a number of different currencies particularly the Canadian dollar, Australian dollar, US Dollar, Swiss Franc and Sterling. Though by doing this I wont be allowing myself much return on the investment.

cheers

portman
Click to expand...

Your idea sounds v risky imo. Why dont you look for a bargain property I am talking half price or less (a lot less outside the cities) and make a few cheeky offers all the time sticking any extra savings in good deposit accounts to avoid any risks such as shares, etc. theres plenty of empty ones around even in good locations which cant sell you could even buy on as your principal residence and rent a room to avail of the tax free income from the rent a room scheme??
 
Thanks for the advice. I was thinking along the same lines as Irondimer about the type of spread for the 100k. I agree that currency speculation is risky and not ideal for solid returns, even though the past few weeks have suggested otherwise specially in relation to the canadian and aussie dollar.

Time to speak to an IFA I think and put a financial plan together. I like the thoughts of buying a property at a bargain basement price, but looking at the fundamentals particularly average wages vs average house prices, unemployment and growth I am more certain than ever we are not near the bottom of the housing crash yet. Despite what the EAs are telling us.

Just a quick question, why should one stay away from Gold EFTs?
 
ETFs are derivatives that track gold and you own a piece of paper with significant counter party risk. The whole point of owning gold is that it has no counter party risk and you do not depend on a corporation, bank or government to perform or remain solvent. Good article here:
How ETFs are like mortgage-backed securities
[broken link removed]

Central banks and savvy investors are buying physical gold and are wary of ETFs:
http://www.gata.org/node/7593
 
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