Hi folks - I am from Oz but living in the US right now, getting paid in greenbacks. Given that the A$ is so low right now, I am thinking about leveraging into the Oz market (converting my US$ back to A$) and riding the A$ as it comes back up.I am planning to stay in the US for a while, and I want to maximise the US$ return on my investment. Some questions:* got any thoughts on this strategy? It is dependent n A$ rising, and I am happy to wait for 12 months or so, or longer.* what should I buy for consistent performance, remembering that I will be leveraging the investment.* should I buy proerty or stocks?Let me know your thoughts by email or on the boards - thanks!!
, I am thinking about leveraging into the Oz market (converting my US$ back to A$) and riding the A$ as it comes back upMichaelWhy would you think that it's going to come back up ??It's not that the Oz dollar or any other currency around at the moment is down - it's that the US dollar is UP - and that's the way it's gonna stay for quite a while.Where it's at is where it's at !!Keep your green where you are and only when there are positive signs for a change should you consider repatriating it.Just my $0.02cHarmy
Why would you think that it's going to come back up ??Yes, to suggest that this revaluation represents a gross error by a very efficient currency sector and that the previous valuation will return to favour, well, that would be bloody dangerous.
Your strategy depends on your investing purpose. Assuming you are investing to provide for your future retirement, then the currency of your investment should be in the same currency of your future liabilities. i.e. If you plan to return to Australia some day to live, then you should gradually move most of your investment dollars to Australia. If however you plan to stay in the USA for the foreseeable future, then irrespective of how overvalued/undervalued you perceive the currencies to be you should keep the bulk of your investment dollars in the USA.While it is probably true that the AUD is undervalued against the USD by something like 10-15%, this may not materially change within the next two years. In fact given the recent momentum, it is quite possible for the AUD to fall below 50 US cents, before it begins its recovery. In my long experience, betting on shorter term (less than 12 months)currency movements is very dangerous.Goo luck with your deliberations.
Michael,take on board what the others have said (they are right) and then ignore them. Yours is just as valid a strategy as any. I am not an expert, am not even fluent in the currency field actually but I do know that the experts have absolutely no idea about the direction of currency markets in the short or long term. You show me an expert that says it will go one way and I will show you one with the opposite viewpoint.I would not only be looking at the Oz I would also be looking at the Euro,probably more so.Assuming you already have US$ investments you are looking in the right direction. If diversification and contrarianism are your style then your outlined strategy fits the bill. Be very wary about leverage, make sure you give yourself a bit of space before margin calls.Good luck and good management.
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