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Post by red_panda on Feb 22, 2016 14:24:43 GMT
What are your views on the currency exchange risk in P2P investments in regards to UK's referendum on whether to stay or leave the European Union. Question applies to both sides of the currency game, those with income and spending in GDP and those in Euro.
I myself have a GDP position in Saving Stream, currently the weakening pound is beating the interest rate.
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Post by wiseclerk on Feb 22, 2016 14:33:13 GMT
It might go up or down depending on the outcome. Since there is no way to know - I don't care much about it, even though I do have money invested at SS and Ablrate and a tiny amount at ReBS.
I consider it unlikely that the fluctation of the pound will totally eat up the 12% interest earned at SS (well it's actually only about 9% after tax under my German residence circumstances).
One thought might be to sell the SS loans shortly before the brexit vote to have cash in the account allowing me to react if I want to. If UK stays in I can then reinvest it after the vote.
My investments via Seedrs and Crowdcube are illiquid anyway, so no need to decide anything there.
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james
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Post by james on Feb 22, 2016 23:42:32 GMT
What are your views on the currency exchange risk in P2P investments in regards to UK's referendum on whether to stay or leave the European Union. Question applies to both sides of the currency game, those with income and spending in GDP and those in Euro. I myself have a GDP position in Saving Stream, currently the weakening pound is beating the interest rate. Unless opinion polls show a close vote my guess is that peak uncertainty will be about a month before the vote. Before that time the European Central Bank (ECB) may announce more quantitive easing that may weaken the euro. Longer term the Euro is likely to be pushed weaker by the ECB and the Pound is likely to increase in value due to reduced uncertainty. This implies that a month before the referendum might be a good time for people in the Eurozone to move money to Pounds. I am UK based and have money invested in Euros. I am delaying returning the money to the UK because of my exchange rate guesses.
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homes119
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Post by homes119 on Feb 29, 2016 23:07:10 GMT
I am EU based and with some money invested in P2P in the UK (on a paper loss at the moment due to exchange rate). I would like to play the GBP strengthening vs the Euro over a 3 year time horizon and I figured rather than just doing so through my bank, why not invest more in P2P in the UK instead and earn interest while I wait for rates to recover? if they ever do of course  In your opinion, which is the safest P2P platform in the UK (open to Eurozone investors of course) which I could use to go long the GBP? I already have money invested in SS (probably not the safest but that debate is for another time) but would like to take this opportunity to diversify across platforms. So far I'm looking at LendInvest (yes, not true p2p but profitable, to my knowledge, and investing assets of relative quality) or Wellesley (assuming that low rates are due to high quality loans ). What do you guys think? Any other platforms you recommend I look into? Thanks! |
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Post by reeknralf on Mar 1, 2016 8:49:25 GMT
I've never understood why many people on here refer to diversification across loans or platforms, but currency risk.
Given that none of us can say with any confidence which way exchange rates are going to move, the only sensible thing to do is hedge against exchange rate movements by diversifying across currencies. I appreciate most people's day-to-day costs are in £'s, but fundamentally many of these prices are coupled to foreign currencies. If the pound goes down, the pound-denominated cost of petrol goes up.
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Post by xyon100 on Mar 3, 2016 6:06:06 GMT
I've never understood why many people on here refer to diversification across loans or platforms, but currency risk. Given that none of us can say with any confidence which way exchange rates are going to move, the only sensible thing to do is hedge against exchange rate movements by diversifying across currencies. I appreciate most people's day-to-day costs are in £'s, but fundamentally many of these prices are coupled to foreign currencies. If the pound goes down, the pound-denominated cost of petrol goes up. I agree that investing in more than one currency makes sense. That said, with a lot of luck involved, I sold all my UK assets and bought Euro when one Pound bought 1.6 Euro. Some time later I used many of those Euro to fund UK property purchases when one Euro was buying close to a Pound. Now I am about 70/30 Euro/Pound. Any which way it goes I can move either way. If the Pound continues to weaken I'll buy more Pounds and vice versa.
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Post by propman on Mar 3, 2016 8:45:54 GMT
I suspect that the inflation impact of the Euro forex rate is much less than the dollar. Yes more imports are from the Eurozone, but the largest inward investors and commodity markets are held in dollars and China & other Far Eastern economies are linked to the dollar. On a worldwide basis, many would say that the Euro is destined for relative falls for the foreseeable future due to structural issues in EU/Eurozone.
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adrianc
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Post by adrianc on Mar 3, 2016 8:50:54 GMT
I agree that investing in more than one currency makes sense. That said, with a lot of luck involved, I sold all my UK assets and bought Euro when one Pound bought 1.6 Euro. Some time later I used many of those Euro to fund UK property purchases when one Euro was buying close to a Pound. Now I am about 70/30 Euro/Pound. Any which way it goes I can move either way. If the Pound continues to weaken I'll buy more Pounds and vice versa. Mind if I ask the actual logistics of that? I presume you didn't just head down to the post office or travel agent and get a big envelope of "holiday money" when then got stuffed under the mattress... UK-based Euro-denominated account? Or...?
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Post by xyon100 on Mar 3, 2016 9:18:48 GMT
I agree that investing in more than one currency makes sense. That said, with a lot of luck involved, I sold all my UK assets and bought Euro when one Pound bought 1.6 Euro. Some time later I used many of those Euro to fund UK property purchases when one Euro was buying close to a Pound. Now I am about 70/30 Euro/Pound. Any which way it goes I can move either way. If the Pound continues to weaken I'll buy more Pounds and vice versa. Mind if I ask the actual logistics of that? I presume you didn't just head down to the post office or travel agent and get a big envelope of "holiday money" when then got stuffed under the mattress... UK-based Euro-denominated account? Or...? It's a simple matter of exchanging and transferring the money between my accounts in the UK and Belgium, and sometimes the Czech Republic. A company such as Transferwise is usually the best option.
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Post by thep2pinvestor on Mar 15, 2016 21:07:55 GMT
I am EUR based but have some investments in £. If I look at monetary policy in the EUR zone, prospective demographics and GDP growth, tendencies to over-regulation in the EU, absence of political leadership (apart from Germany), ....what did I forget...? .... i am not expecting the £ to loose against the EUR in the long run. For me the £ is a worthwile and healthy diversification.
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bigfoot12
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Post by bigfoot12 on Mar 16, 2016 11:17:05 GMT
....what did I forget...? .... i am not expecting the £ to loose against the EUR in the long run. How about the Tory party tears itself apart during the referendum allowing Labour to win the next election. What is your price on GBP/EUR then? For me the £ is a worthwile and healthy diversification. I am not arguing this point, and the above isn't my base case.
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adrianc
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Post by adrianc on Mar 16, 2016 14:36:47 GMT
....what did I forget...? .... i am not expecting the £ to loose against the EUR in the long run. How about the Tory party tears itself apart during the referendum allowing Labour to win the next election. What is your price on GBP/EUR then? For me the £ is a worthwile and healthy diversification. I am not arguing this point, and the above isn't my base case. But it is one that definitely needs considering.
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