Timeline for How to construct the safe part of a buy and hold portfolio as resident of a developing country?
Current License: CC BY-SA 4.0
5 events
| when toggle format | what | by | license | comment | |
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| Sep 19 at 13:17 | comment | added | Grade 'Eh' Bacon | That doesn't mean your suggestion is a poor one, just trying to highlight that the currency risk isn't removed. Many people invest in global financial centres outside their own country, so what you are suggesting would be I think fairly typical [not that I am recommending one way or the other; I am not knowledgable about Poland]. | |
| Sep 19 at 13:15 | comment | added | Grade 'Eh' Bacon | Correct - if you plan on retiring in Poland and expect your retirement expenses to be paid in Zloty, then any currency except zloty represents a potential currency risk. To your point made further in your answer about 'multiple foreign currencies offsetting eachothers' currency risk', that may be true to a degree, but ultimately you would still be left with the risk that the average of all those currencies, moves against the Zloty [eg. That the Zloty strengthens vs the average, and your funds can no longer buy as much in local goods]. | |
| Sep 18 at 19:25 | comment | added | Bonilla | @Grade'Eh'Bacon: But if I invest in an index consisting foreign government bonds, these will be denominated in their respective currencies. Doesn't that imply a currency risk vis a vis those currencies? | |
| Sep 17 at 15:20 | comment | added | Grade 'Eh' Bacon | Note that currency risk is only relevant if the funds you are investing are different than the currency you will use when you retire. eg. Currency risk of the Zloty is irrelevant if you will retire in Poland. Of course as you point out, there is potentially inflation risk higher than expected for a 'safe' asset. To many, these two items will seem similar, but the difference can be highly relevant. | |
| Sep 15 at 12:23 | history | asked | Bonilla | CC BY-SA 4.0 |