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How do expats protect against exchange rates


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Planning on retiring in Thailand in two years. I have just about started to understand how to invest in retirement in the uk. I will probably use stocks/bonds 50-50 and planned on investing in vanguard platform. 

 

The obvious problem is the strength of the bhatt. If it go’s back to 37 to the £ then that is very bad. 

 

An obvious solution is to move all my money to thailand and invest in a similar portfolio in bhatt. 

 

Is this feasible? I get the impression expats keep their money invested in their home countries and transfer when needed? 

 

 

 

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When retiring here 15 years ago I  plan my future pensions payments to enable me to have a comfortable life @35 to £. Kept lump sum intact for 1 year extensions.

Food for thought on foreign exchange rates:  The dollar was trading at 25 Baht to $1 for many years until the financial crisis in 1997.  The exchange rate rose fairly rapidly to more than 50 to $1, th

In those days 20 baht would buy a lot.  Not so anymore.  Many prices even local merchandise higher than in USA.

I suspect I will do the same. 

 

I am assuming at the time you thought the risk of transferring everything was too high? Political changes, relationship risks (not being able to get back if it went  bad).....I certainly don’t feel confident transferring everything as I don’t feel I understand thailand the same way I think I understand the uk.

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Many thanks. Do you now if there are good etf products in Thailand? Similar to vanguard in uk/us? 

 

I would be be interested in converting at least some of my money to bhatt and buying etfs in bhatt in Thailand, just for peace of mind on exchange rates. 

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You have to make the decision as to whether you want to retire or become a currency trader.  Look at the £/baht rate history and make a plan A for one end of the spectrum and plan B for the opposite end.

 

And stick to the old adage of never having all your eggs in one basket.  There are multiple opportunities that have opened up since the Thai baht hit 37 and those opportunities will cease if it ever gets back to 70.

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19 hours ago, neytil said:

The big boys do it with currency swap forward contracts.  For small fries, many funds and ETFs also hedge currency risk using forward contracts.

And the majority of them lose money.

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I used to hedge with a UK company called World First the biggest currency traders in the world. I have small assets in the UK, but a lot in the US and when I retired a lot in Japan. For the few years before retiring I would buy other currencies eg Swiss franc, Canadian Loonie, Aussie dollar on the theory that not all currencies go down together. I was not trying to make money understand, but just to hedge and preserve purchasing power. It worked very well for a period until my account was moved from Britain to Australia where World First is not a deposit taking institution. I had to get rid of the money with in a month. Basically I changed it all into baht (which was the currency I was spending in). At the time the US dollar was 33 to the baht and is now 30. Other currencies were similar.....I built my house with Japanese yen that I earned at 120 to the $, it was about 80 to the dollar when I paid for the house. My advice is not the speculate but to try to conserve your purchasing power.

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22 hours ago, LeeUklondon said:

I suspect I will do the same. 

 

I am assuming at the time you thought the risk of transferring everything was too high? Political changes, relationship risks (not being able to get back if it went  bad).....I certainly don’t feel confident transferring everything as I don’t feel I understand thailand the same way I think I understand the uk.

I didn't transfer nearly everything until September 2005 when the pound went to 75 - £ , I thought at the time that can never last it didn't and has gone down everything since. 

When my bonds tied up in Nationwide finished I got the rest of my money over it was about 60 - £ then from memory.

By then it was about 5 years to go before my UK pension. 

My private pensions took a hit 2008 but by 2012 when they were due they recovered a bit and weren't as bad as I thought they gonna be. 

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23 hours ago, LeeUklondon said:

Planning on retiring in Thailand in two years. I have just about started to understand how to invest in retirement in the uk. I will probably use stocks/bonds 50-50 and planned on investing in vanguard platform. 

 

The obvious problem is the strength of the bhatt. If it go’s back to 37 to the £ then that is very bad. 

 

An obvious solution is to move all my money to thailand and invest in a similar portfolio in bhatt. 

 

Is this feasible? I get the impression expats keep their money invested in their home countries and transfer when needed? 

 

 

 

I keep money in the USA.  Bring it here as need to a US dollar account at Bangkok Bank and exchange when the rate is favorable (not anytime recent).  I invest with Fidelity.  Excellent support, easy to use website and also Active Trader Pro that can show minute to minute action with options to buy/sell.  Good to watch if you are waiting for a particular price to buy.  Outstanding historical information and research.  The Thai SET as  have looked into it typically displays 30 days of history and little else in the way of research. 

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