In today's climate we are all looking for one thing; preservation. That's right, forget making money, most of us are just looking for a way to make sure that our money doesn't slide out from beneath us in this economically destabilizing world.
Earlier this year, I had most of my funds tied up in dollar markets, and I worked hard to liquidize my funds and on on September 1st, moved the bulk of them from dollars to pound sterling at a rate of 1.845. I figured at that stage that I had done pretty well; I had transferred these funds across at rates of 0.5ish, and I figured that the dollar would decline against the pound and I would be able to repatriate (so to speak) my assets in the near future. As far as I was concerned, I was in a win-win situation.
But for some reason the dollar or the pound would just not follow my plan. The dollar remained strong (for different reasons that I've yet to blog on) while the pound slumped to record lows through Q2. Today the tradeable rate sits at 1.465 which would mean that a reconversion would cost me a considerable 1400GBP per $10,000. Ouch; the harsh reality of a 20% drop. The only good news here is that it's only slightly below my initial trading rate for the mostpart.
So perhaps chasing the dollar shouldn't be high on my priority list. With many forecasting sterling's parity with the euro in 2009 and gold's current recovery... is it time to explore one of those options? Also the possibility of "sitting tight" and just riding this out even seems viable at the moment. Comments, as always, are welcome!
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