Share your currency or cash portfolio

[qcomer]

Considering the dollar hitting 20 month lows against the Euro, I would like to know if folks here have a diversified cash portfolio or they trust the US dollar? The impact of dollar decline is not only an exchange rate differential so you don’t worry about it unless you travel to Europe. The impact is real as it pushes up import prices (most commodities/raw materials,gold,walmart goods). Also I believe most folks here are saving for a downpayment few years down the road and weak dollar definitely hurts that.

In short keeping all your savings in a dollar CD that yields 5% is not a good idea if dollar loses 10% per year. Its like investing in a stock that gives 5% dividend but the stock price goes down by 10% as the company (US govt) debt keeps growing. If folks feel comfortable, please share how you stock up the cash that you are saving for a downpayment few years down the road? I personally have a 15-20% currency exposure to euros/franks/gold.

[poorgradstudent]

I’d like to diversify into foreign currency, but am concerned about transaction fees wiping out any potential benefit. What’s the cheapest way to exchange currencies, especially in relatively small (Several thousand rather than tens of thousands) of dollars?

[gold_dredger_phd]

Get a foreign currency brokerage account through interactivebrokers.com and hold stocks that pay dividends in foreign currency. Euros/Canadian dollars/Swiss Francs, whatever. The Dow hardly went up this year when priced in Euros.

Your wages are denominated in dollars and so is everyone else’s in this area. Get foreign currency income and be partially insured against the dollar implosion.

[Nancy_s soothsayer]

Without being specific, I started buying lots of cheap fishpond lands in an Asian country. Proceeds from sale of fish gets plowed back to more fishpond land. When I retire, either I sell the developed land or go fishing a lot from my fishponds myself.

[(former)FormerSanDiegan]

Not currency, but I’ve put a portion (less than 10%) of my portfolio into foreign ETF index funds. Primarily EFA (Europe and Far East) and EWJ (Japan). Kinda boring, foreign stocks, but they have benefitted from the dollar drop over the last couple years, especially EFA.

Foreign Fishponds ? Now that’s creative.

[(former)FormerSanDiegan]

Here’s another idea …
Another opportunity is perhaps purchasing farmland in Colombia, Afghanistan or perhaps Peru. You can use the proceeds from the cash crops to develop the land for when these future powers become more powerful than the US because of our addiction to substances caused by severe depression.

[tugg49]

I was in the UAE a few years back and a drinking buddy said to be a hi-roller and get some Iraqi Dinar. 750 bucks a million. Still got it and IIKTWIKN I would have bought Russian Hookers instead. What a rip. But who’s to know what will happen when Imperialist dog nations make even for past wrongs.

Currencies are tough!

[Nancy_s soothsayer]

I read a blog somewhere (forgot where) wherein a blogger who obviously dislikes the current president wrote that the Bush family recently bought a HUGE ranch from a coca and beef producing South American country. I don’t think it is to produce a cash crop, but to capitalize on the current high value of the dollar compared to the foreign country’s currency. Well, the info, however, could just be pure rubbish.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

We (the wife and I ) just bought some Agricultural land at about 50% of what the area was going for a year ago, Was not our whole wad (the rest in FDIC CD for the moment).

Thought it was a good hedge against falling dollar PLus it has some great views so who knows maybe we will start a small ranch there someday.

[PD]

Will people trying to hedge against the dollar prop up the RE market? I have been considering doing something similar – buying land somewhere that isn’t a bubble location.

[PD]

Is anybody else totally shocked at the upward movement in homebuilder stocks today? WTF??? Is the plunge protection team busy buying up homebuilder stocks in an attempt to convince everyone that things are going to be just fine?

[kev374]

my investments are mostly in international index funds and those have been doing extremely well lately.

[an]

PD, nothing going on in the market is shocking or should be shocking. It’s probably just a dead cat bounce.

[rseiser]

The common saying is that the Singapore dollar is the soundest currency (don’t know why). Also the Swiss Franc might be ok. I am interested in opening a foreign account like I have one in Germany. There, I can pretty much buy most stocks or get interest on the cash balance.
What I am trying to find out for years, is if it is correct that one can pay taxes on the stock gains in the local currency. This is what I read years ago. What that means is, that if I have a stock which gains 500 Euros but $1500 in dollars (because the Euro went up during this time), I would only have to pay tax on the 500 Euros (~$650) and not on the $1500. This would prevent you from paying taxes just because the dollar is collapsing, even if you don’t have a real gain.
Of course, if the Euro drops this rule goes against you. Although, I saw one article that referred to IRS sections, that you can actually elect which method you use to pay the taxes (foreign entity (first method), or American capital gains (second method)).
I would really appreciate if anybody knows anything about this.

[powayseller]

rseiser, call CPA Michael Gallon, and tell him I referred you. The guy knows everything about taxes, and his prices are good. My sister and mom spent days doing my sister’s very simple tax return, and I took her to see Michael, and he found a couple grand in overpayment that she missed. So his fee of $130 more than made up for the refund.

Michael Gallon 619-286-6116

I really want to buy a bunch of gold, but can’t convince my husband to buy more than 5% of our assets into gold. What should I do now? I’m basically screwed with the dollar going down, and there’s nothing I can do without his agreement. He’s rather put the money into an inverse stock fund, like the inverse Nasdaq. He thinks gold is too risky, too volatile. He’s very smart, and he remembers the volatility over the years, so I can’t say I blame him.

One advantage to bullion or gold coins in physical possession (safety deposit box included) is that any intentional or accidental interference in our electronic communication cannot wipe out our money. That came back to mind after today’s announcement that Al Qaeda plans to hack into our banking and financial systems anytime after Friday.

[Author]

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