The Euro - and my nervous savings!

Escapees

I know there have already been countless threads over the past 5 years here on the crash of the Euro, but things really do seem to be happening in the background now that really could bring it about. I'm getting nervous and stressed as I have built up significant savings over the years (no house) which are just sitting in a euro bank account, earning almost zero interest and effectively depreciating against other currencies.

I predicted months ago that the euro would go to parity against the dollar and this seems to have almost happened at this stage. But despite my reasoning behind it, I bizarrely still did absolutely nothing with my savings apart from foolishly hope that it wouldn't happen. So really, I'm just looking for some simple advice or reassurance on what to do. I don't want to be looking back in anothet 6 months time thinking 'why didn't I trust my instinct and take action' rather than watch a car crash unfold.

So, assuming I might need access to my savings in a years time, is the advice given here 5 years ago still relevant - I.e. split your savings into different currencies like AUD, USD and maybe some precious metals? Or am I just panicking for nothing?!

coylemj

Why are you so fixated about the Euro relative to the US Dollar and not sterling?

The improvement in the dollar exchange rate is not because the euro is collapsing, it's because the US economy is showing signs of recovery and they have started to put up their interest rates which causes the currency to improve relative to other currencies.

Your day to day living expenses are in Euros and if you buy a house you will be paying for it in Euros. Why would you move your savings out of the euro and needlessly take the risk that the currency you buy goes in the wrong direction? If anyone here tells you to shift your savings into foreign currencies or precious metals, they are encouraging you to speculate with your savings based on the advice of someone you never met and who's 'expertise' amounts to writing posts in an anonymous internet forum.

Nobody knows how currencies will move in the future, it's all speculation. Everyone said that the dollar and the US stock markets would collapse if Trump was elected - the direct opposite has happened. So stop panicking.

Escapees

Thanks coylemj - I could argue back about how the writing really does seem to be on the cards for the euro versus other currencies, but I recognise your username as someone who's given good advice in the past so thanks for the comments and the reassurance!

porsche boy

coylemj wrote:

Your day to day living expenses are in Euros and if you buy a house you will be paying for it in Euros. Why would you move your savings out of the euro and needlessly take the risk that the currency you buy goes in the wrong direction? If anyone here tells you to shift your savings into foreign currencies or precious metals, they are encouraging you to speculate with your savings based on the advice of someone you never met and who's 'expertise' amounts to writing posts in an anonymous internet forum.

Good points here OP, short of an investment manager, I wouldnt put all my stock in someones opinion. As for presious metals, the price of gold has been the same in every season of Gold Rush, take from that what you will. Best of luck.

tanit

To be honest with you and at the risk of being accused of pro-Euro right now the Euro seems to me as the most stable currency. You have Donald Trump in America about to start a presidency that if we use Arnold Schwarzenegger record in California is going to finish so, so bad for the Americans. And you also have the UK leaving the EU and the only thing right now keeping them from feeling the full consequences of that is the fact that there are hopes about the deal they get when leaving or the chance of that being stopped somehow in court.

Speculators did manage to put several small countries on bailout in Europe but they couldn't and got mauled when they went against bigger ones. Spain never went into full bailout and they (speculators) run out of money there. The attacks to smaller countries after were attempts at trying to make up for the losses in Spain. They didn't come back full blown against the EU countries after. In my opinion that showed a significant amount of resilience in the EU that most people do not seem to have noticed but the financial markets have definitely recognised.

The fact that currencies in Western countries (dollar, euro, sterling) seem to be going to parity is completely unrelated in the long term to the economic stability of the countries they represent and more to do with the long term scenario of going into full blown parity to eliminate foreign exchange risks and uncertainties. People in business like to know that the amounts in their contract today are going to be the same amounts when they have to pay those contracts and the whole process has being going on since the idea of a common currency went into practice in Europe. And you can also see that process in the way that International Accounting Standards are being applied internationally. There is a long and slow process to see business transactions happening following the same standards in most countries. It reduces risk and increases business confidence and so on.

If you want a basic saving strategy, the ideal is to have part of your savings (they recommend at least 6 months of living expenses) in an easy to access account. I'd say a deposit account that you can access the money either immediately or within a couple of days without penalties. The rest I would go for some long term investment, let's say 5 years that you don't touch and you can invest in more or less secure ways. In 5 years you should be able to have some decent earnings but beware of fees AND levies. The more complicated you go with your investments the more they are going to charge you in fees. Consider how comfortable you feel dealing online with your investments as this can save you some money in fees. Also consider your investment profile you know whether you are risk averse or more comfortable with risk (behavioural investment). Irish Life have a little investor profile builder on their website if you want to try and you might find others online.

I wouldn't go overly complicated with investing in other currencies and countries if you are not very experienced and very comfortable with the ups and downs of markets, because as things are going there is going to be a significant amount of ups and downs in the markets. And at the risk of being accused very pro-EU I consider the EU to be the most stable market in the long term as things are going regardless of how things look right now

Forbearance

Dollar will probably go par with the euro in mid 2017.