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Post by ajf1985x on Jun 1, 2018 6:58:18 GMT
Hi,
I’m new to Mintos, have read a lot of the threads - thanks for the insight.
However one of the areas I am concerned about is exchange rate risk.
I am interested in EUR loans due to buyback and greater range/ diversification.
At the moment 1 EUR = .88 GBP ish
If the pound strengthens so 1 EUR = .75
When converting back to GBP you are looking at a 16% loss plus fees.
Do others recognise this and if so how do you mitigate this risk?
Or do you see the idea of EUR investing as part of your wider diversification strategy and worth the forex risk?
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Post by Ace on Jun 1, 2018 7:37:23 GMT
Yes, I generally use euro investments as a small part of a diversification strategy.
Although you've highlighted the downside risk there is a roughly equal chance of an upside. Should the pound weaken we could convert back to pounds and make extra profit.
I don't invest cash that I would need in a hurry, so I'm free to wait for favourable exchange rates.
Another option is to keep any profits in euros and use them for spending money on foreign holidays. Works well for me as I use a Revolut card abroad to pay for hotel bills, car hire and restaurant bills in euros.
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jo
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Post by jo on Jun 1, 2018 9:23:20 GMT
I use a spread bet company to hedge euro. Each £ per point on a short eur/gbp hedges euro 10k.
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p2pmark
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Post by p2pmark on Jun 1, 2018 9:48:59 GMT
Bear in mind that our living standards are influenced by the pound:euro exchange rate regardless of p2p. If the pound strengthens then eurozone imports become cheaper and so our real incomes rise. In that sense, holding some cash / assets in Euro acts as a hedge against fluctuations in the exchange rate.
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Post by ajf1985x on Jun 1, 2018 12:20:25 GMT
Thanks.
Really insightful comments and ones that echo my thinking especially around hedging changing cost of living from sterling strength/ weakness.
I would hope the long term view of sterling is that it’s stronger but other investments will provide the balance.
I think I have been convinced to dip my toe into the waters of Mintos!
Thanks
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Post by stevec2x on Jun 5, 2018 9:18:54 GMT
In my case, I live in Spain,but all my income and investments (bar Mintos) are in GBP. I keep a certain amount invested in euros via Mintos and use this for the monthly bills. In time, I expect to increase the amount invested in euros in order to counter balance the much larger sum I have in my UK pension fund. Hopefully, exchange rate movements will then have a roughly neutral affect on overall wealth.
I'd be interested to hear if anybody else is in a similar situation.
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toffeeboy
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Post by toffeeboy on Jun 5, 2018 12:11:40 GMT
I agree with Ace and definitely get a revolut card if you are dealing in different currencies as you can hold the money there and transfer it back if the exchange rate gets high enough for you immediately.
The exchange rate variance is another part of the risk/reward providing this isn't money that you are going to need immediately at any time.
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Post by stevec2x on Jun 5, 2018 15:48:08 GMT
I use TransferWise, but a number of people have mentioned Revolut. I must look into it!
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Nomad
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Post by Nomad on Jun 5, 2018 15:58:56 GMT
I use TransferWise, but a number of people have mentioned Revolut. I must look into it! Both are very good!!
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toffeeboy
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Post by toffeeboy on Jun 5, 2018 19:04:54 GMT
I use TransferWise, but a number of people have mentioned Revolut. I must look into it! I think the main difference use to be that transferwise was just for transfers whereas you can actually hold currency in a revolut account although I think I got an email about transferwise now offering accounts to hold money in.
Also the first £5,000 of exchanges each month is free whereas transferwise charge for all exchanges.
I think it is worth having a revolut account open as you never know when it will come in handy and the card only costs €5 (you don't have to have a card)
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Post by stevec2x on Jun 8, 2018 9:12:15 GMT
Yes, TransferWise now has the facility to act as a bank account in multiple currencies, and the debit card is free, but ATM withdrawals are only free up to £200 pcm. Currently, they can't do direct debits, which is a bit of a pain, but they say they're working on it.
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