Falling Pound -Global Passive Equity

Index tracking funds and ETFs
Stanley117
Posts: 8
Joined: December 27th, 2016, 1:11 pm

Falling Pound -Global Passive Equity

Postby Stanley117 » January 9th, 2017, 11:23 pm

I've been looking to invest a bit more in my Global ETF portfolio but as pound has dropped over last week this has made Global ETFs assets more expensive. The pound fell further on Monday following May's interview over the weekend.

Perhaps I should wait or look at UK equities or fixed income instead or even hedged ETFs now the pound is so low.


Do readers think it is now a bad time to invest in Global ETfs ?

GeoffF100
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Re: Falling Pound -Global Passive Equity

Postby GeoffF100 » January 10th, 2017, 8:21 am

Nobody knows. Invest a little at a time and you will not be completely wrong.

Stanley117
Posts: 8
Joined: December 27th, 2016, 1:11 pm

Re: Falling Pound -Global Passive Equity

Postby Stanley117 » January 10th, 2017, 10:50 pm

GeoffF100 wrote:Nobody knows. Invest a little at a time and you will not be completely wrong.


Yes that's the sensible thing to do. Although most of the gain in my global equity ETF portfolio over the past year has been due to the collapsing pound I was thinking it could not get much lower but I suppose the pound could still go an way from here on depending on what course the politics takes.

GeoffF100
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Re: Falling Pound -Global Passive Equity

Postby GeoffF100 » January 11th, 2017, 8:24 am

It is unpredictable. The government looks set for a "train crash Brexit", in which case the pound will fall further. Alternatively, they may shy away from that when the time comes, in which case the pound will rise. In the meantime, they will not say. If they say that they will favour curbs on freedom of movement, business will flee. If they say they will favour trade, they fear that they will lose votes. The markets have made their judgement for now, but it could go either way.

edited for poster to add "curbs on. Raptor

hiriskpaul
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Re: Falling Pound -Global Passive Equity

Postby hiriskpaul » January 12th, 2017, 3:57 pm

GeoffF100 wrote:It is unpredictable. The government looks set for a "train crash Brexit", in which case the pound will fall further. Alternatively, they may shy away from that when the time comes, in which case the pound will rise. In the meantime, they will not say. If they say that they will favour curbs on freedom of movement, business will flee. If they say they will favour trade, they fear that they will lose votes. The markets have made their judgement for now, but it could go either way.

edited for poster to add "curbs on. Raptor


Whilst I would agree with this, I would add that other unknown/unanticipated events may be far more important in determining future exchange rates.

Nobody knows where the pound is heading. If anyone did they would keep it to themselves and become a billionaire.

I think the best thing to do is work out what various foreign currency exposures one is comfortable with and if current exposure is way out of line with that either correct or hedge. I am currently massively overweight the dollar and underweight Euros. Ideally I would like to correct that, but cannot find attractive Euro denominated bonds and don't want more equity exposure. Also I like the $ fixed income assets I am holding and don't want to sell. I probably should hedge my $ exposure, but don't really want to pay the price!

Probably a bit OT for this board.


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