Hi all I just relocated to London from mainland Europe. Keeping our house there didn't make sense for various reasons. Now I'm sitting on a pile of cash (Euros) and I'm not sure what to do with it. We invested in metals a few years back, but I don't see a buying opportunity right now. I also think housing in the UK is overpriced, so I'd rather wait and see before buying a house here. I think the stock market and inflationists will be in for a rude awakening when governments actually start cutting back spending and taxing more (which is inevitable? given that most gov. debt is short term debt). The Price/Dividend ratio is rather poor at the moment, so I don't think stocks provide good value anyway. Just letting the money sit on a bank account doesn't sound so great either since I don't want to give the bank a free ride. I really just want to retain purchasing power while earning a little interest, but this does not seem possible given real inflation rates and ultra low interest rates. I don't dare buy longer term bonds even though I'm more afraid of 'deflation' than 'inflation'. It's not an easy question to answer. I'd be interested to hear what others are thinking. Maybe I should pick a much more offensive strategy rather than try to be so defensive. -Callisto
Stop worrying about what's overvalued or undervalued unless you know what you're doing. Consider a broad asset allocation: a) Stocks (Developed + Emerging) b) Bonds (Govt + Corporate) c) REITs (US, Europe, Asia) d) Commodities (a broad futures index) e) Cash (diff. currencies of your choice) You can replicate all the above with low cost ETFs. 20% in each group and rebalance just once a year. Historically over the last 35+ years this would have given you very few down years (2008 being a notable exception) plus you'd have beaten price inflation with very low volatility.
How about a (vacation) condo in southen Florida, or western US where the prices are starting to level off? Nice place to visit in the European winter months
You saying you're renting at the moment, living in a condo, living with friends/relatives, RV, trailer park or living in your auto...what ? Simply, your current living situation could have an impact on what you should do with that cash. For example, if you and your spouse living in an auto...go buy a cheap house. Seriously, my point is that you haven't said anything about your personal life. Thus, if you were in your golden years (elderly) and already have a nice pension financially supporting you... Use that extra cash you got from the home sale and go see the world (travel). It's what I would do if that was the case. Mark
With the US Dollar getting set up to be pulled as the worlds reserve currency in the next 12 to 18 months there are steps you can take. I have liked playing a Canadian Dollar LONG play for many months now while looking for oil to take off again (which it has now done). Canadian dollar play is like a "Petro Dollar" play imo, and I do not mind being LONG the Canadian dollar at this time from a risk standpoint. Several years ago I already acquired physical gold/silver 1 oz bars/coins, so I am good there and have not been buying anymore. I know many who are buying land/property in Panama and Costa Rica and that is something I may even look at here in April or May. Heck, even a large group from an office within the CIA just all took earlier retirement and have bought land in South America. I have also been negotiating some deals to acquire utility type 6 to 8 seat aircraft that I feel with appreciate going forward as the US economy gets whacked by the inevitable US Dollar decline (to be flipped to buyers outside of the US). Aircraft prices are really low and there are many really good deals right now.....I can tell there is some "plane dumping" hitting in the US aircraft market right now. You have to look around and do your own due diligence, to see what you think will APPRECIATE as the US Dollar gets yanked as the worlds reserve currency........and very soon, just around the corner now.