Where to put my cash long term?

Discussion in 'Forex' started by Ewhar, Jul 28, 2011.

  1. Ewhar

    Ewhar

    Hi,

    I want to move about half of my cash into currency ETFs. Long term capital preservation, or minor low-risk growth, is the goal so I'm not going to use much leverage (if at all).

    I'm thinking

    30% - Chinese Yuan
    10% - Indian Rupee
    10% - Brazilian Real

    These funds will be treated like a long term CD. No trading, no tracking, no stops.


    Do you guys see this as fairly safe in the long term? Or should I add some Euro/Yen? To be honest I'm not sure how those would affect long term risk overall--half my capital is still in USD.
     
  2. I would allocate 25-30% in shorting aud/usd.
     
  3. LeeD

    LeeD

    Read small text in ETF description. Chinese Yuan, Indian Rupee... These a currencies are subject to strict government control and a foreign speculator, such as a fund, can't trade these currencies outright.

    Most likely ETFs gain exposure to these currencies via non-deliverable forwards (or NDF). If it is the case, the ETF performance may be significantly different from the underlying currency.

    Because NDFs based on non-deliverable currencies cannot be hedged with the underlying currency, the market is more like betting on sports events where the price of a NDF already factors in any currency appreciation expected by the market.
     
  4. Ewhar

    Ewhar

    Thanks for the insight I guess I may just need to open some foreign bank accounts & figure out how to get my money over there
     
  5. between buttocks right and sit tight
     
  6. rks

    rks

    definitely india. great annum interest rate and you can be sure that it will stay so for the next 10-20 years. Looking at the demographics of the place, young people, it will grow even further. There are many other reasons too, but all this in short.