August 6, 2006 at 4:41 PM #7114
Like a number of other people here, our money is in short term CD’s. I would like to diversify into Euros but haven’t found a good way to do that yet. The US banks that offer Euro denomiated CD’s seem shaky. I also don’t think it would be a good idea to just hold Euro’s without getting any interest. What to do? I’m going to stick with dollar denominated CD’s until a clear answer comes along.
I know a lot of people are diversifying into gold, but that’s too speculative for me. Maybe if gold drops, I’d be willing to take a small position in gold, but nothing significant.August 6, 2006 at 5:06 PM #30969
Why Euros? Why not Swiss francs? I think the latter has a much better likelihood of maintaining purchasing power than the Euro, which is after all a currency without a single issuer. The Swiss government is far from perfect, but it seems less inclined to do really idiotic things than most of the others, including the ones in the Euro bloc.August 6, 2006 at 5:26 PM #30972
I’ll look into Swiss Francs. You would you invest in them?August 6, 2006 at 5:32 PM #30974
I’m not sure exactly what you are asking. Would I invest in them? Yes.August 6, 2006 at 5:37 PM #30975
Sorry, I mean’t to type “how would you invest in them?” Is there a Swiss Franc CD or some other investment vehicle or do you just keep Swiss Francs in a coffee can under your bed?August 6, 2006 at 6:00 PM #30978
There are a number of possible investment vehicles for Swiss francs (abbreviation: CHF). My favorite, assuming you don’t need absolute instant liquidity, is the CHF annuity. It has a number of advantages over other ways of investing in the CHF, including:
1. Better interest rates
2. Good liquidity
3. No maintenance fees
4. Asset protection
The minimum to start with is about $20,000, but you can add smaller amounts later if you want to.
If you want contact information for the company I’ve used, you can email me at my hotmail account: stheller at hotmail dot com. I usually get only junk mail there, so post here first to let me know that I need to look for your email there.August 6, 2006 at 6:49 PM #30990masayakoParticipant
“Maybe if gold drops, I’d be willing to take a small position in gold, but nothing significant.”
And that is not speculative?August 6, 2006 at 9:53 PM #31008
I am also waiting for gold to drop, to take a 5-10% position. It is NOT speculative. Think about it this way: when critical mass starts thinking as we do that the dollar is a risky holding (include foreign central banks in this group), what will they buy? Like us, they have only a few choices: gold, euros, swiss francs, Canadian dollars. Those will be further increasing in value as more people buy them.
The dollar is risky to me, and I am concerned holding it. It is the currency of my country, but its value is falling relative to other currencies. That means imported goods will keep rising in price (inflation). Wouldn’t it be great to convert your euros back to dollar in 5 years, when the dollar has lost another 20% of its value?
I am investigating how to buy euros, from my cousin who works for a large German bank. I will post my findings about the German laws, whether they have FDIC insurance, and if anyone can open an account in Germany.
Please post your info about the Swiss annuities, and a website if you have one. I am sure many people are interested, and that would keep you from getting hundreds of e-mails.
Diversification is my best bet. Again, my discomfort with the dollar is a feeling I will act on. I would hate to be one of those people in line at my bank when they run out of money after the next banking crisis.August 6, 2006 at 10:11 PM #31011
You are right to be concerned about the dollar, since the only thing holding it up is public denial about its actual value (sound familiar?) and foreign central bank purchases. You are also right that owning gold is not speculative, but conservative. Unfortunately, most Americans (and I’m sure most people in many other countries) know very little about gold, but I think they are going to get a very expensive education fairly soon.
Speaking of gold, I wouldn’t try to time the gold market, but would be buying a portion of the amount I wanted to hold every so often. Of course, if there is a big drop, that would be a good time to buy an extra piece. However, I’m not sure we are going to have a big drop again before the next big rise, so you could end up paying a lot more by waiting for the perfect entry point.
But going back to the Swiss annuity question, here is a fairly good explanation of their features. It includes the contact information for the annuity broker I’ve dealt with. You don’t pay any extra for going through the broker; although they get a commission from the insurance company, it doesn’t reduce your return, but just reduces the insurance company’s profit margin.
I don’t have an opinion on Swiss variable annuities, as I haven’t studied them well enough. In my opinion, however, their fixed annuities are a good place to put some money for safekeeping and protection agains the demise of the dollar.
I don’t have any connection with the insurance companies or the broker other than being a client; they don’t pay me for suggesting them.August 6, 2006 at 11:15 PM #31018
Both Zeal Intelligence and Chris Johnston, to whom I pay membership fees, recommend waiting to buy gold. Zeal’s newsletters in particular go into great detail on gold – this last rally will fall back too, just as the othes. They are waiting for gold to go back down to $560, which should be in the fall. Patience is key in investing, as Chris mentioned before. Although I am nervous not owning any gold, I am going to be patient and take the advice of these people whom I trust. The rally in gold is not sustainable; it will climb, but the slow gradual climb lasts; the quick rallies end up falling back and I don’t want to buy on one of those temporary rallies. Zeal explains it all so well, and I am convinced now to wait.
I think oil is more valuable than gold though. Our economy is so dependent on cheap oil. High oil prices, or no oil would cause a depression. We need oil as badly as food and water. gold is secondary to gold, that’s for sure. I am going to buy more oil and natural gas stocks, as recommended by Zeal,but this is going off topic.
the main point is to diversify, since we don’t know the future.August 6, 2006 at 11:28 PM #31021VCJIMParticipant
I will be meeting with a French banker next weekend, my main topic for him will be investing in Euros. Do you have any specific questions you’d like me to ask?
Here’s a list off the top of my head:
How can an American invest?
Are there investments like CDs?
What safety / insurance do they have?
Do I need to travel there, or can it be done from here? (Not that I mind a trip to France, mind you)
What sort of documentation will be required?August 6, 2006 at 11:44 PM #31022
Transaction or exchange rate fees? How do we make withdrawals, and what are the wiring fees? Interest rates? Downside risk of euros (he should be able to give you a couple). Will you start a new thread when you get the info together? Oh, and does he know why the Bank of Italy would buy sterling instead of euros? What does he think of Swiss francs and of the US dollar?August 6, 2006 at 11:50 PM #31023VCJIMParticipant
Good questions. Yes I’ll start a thread after I meet with him. Let me know if you think of any others.
The Bank of Italy is moving away from the US dollar because it is becoming more risky; the same reasons we want to diversify away from it. A little larger scale than you and me, though : )August 7, 2006 at 7:13 AM #31032privatebankerParticipant
Not sure what amount you are talking about investing here but, most US based Private Banks offer F/X denominated CDs, etc. I can do all the popular ones (currencies) but this is more or less just a service I provide my clients that have a full relationship with us. You may want to check around though, all Private Banks have different minimum qualifiers to work with them and most offer this service.August 7, 2006 at 7:32 AM #31033X1Y2Z3Participant
For the person asking about how to invest in currencies. Try http://www.everbank.com. Its a highly rated bank that offers virtually all currencies. They also have CDs made of of currencies: asian tiger CD, commodity CD, etc. If you invest in stocks, I belive their is an ETF (exchange traded fund) that invests in the Euro. I can’t remember who offers it, it may be profunds. Everbank also has a good email newsletter called the daily pfenning that gives updates on the currency market. Good luck.
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