Foreign Currency

[el171s]

hi dennis

besides uk traded endowment fund, what other safer and easier options can we invest for foreign currency, esp the pounds which is now at a low? ie forex, etc

what is the min amount that one needs to commit for the uk traded endowment fund?

tks

[Dennis Ng]

hi dennis

besides uk traded endowment fund, what other safer and easier options can we invest for foreign currency, esp the pounds which is now at a low? ie forex, etc

what is the min amount that one needs to commit for the uk traded endowment fund?

tks

Hi el171s,
UK Traded Endowment is not a fund (unit trust), it is buying over Existing UK Endowment policies with remaining term of min say about 5 years to maturity. Advantage when you do so is you take over a policy with built-up Cash Value of over 10 to 20 years, instead of waiting 20 to 25 years yourself if you get a New endowment policy of 20 to 25 years.

Min investment is S$20,000.

UK Traded Endowment is unique as even in the worst case scenario of the collapse of the UK Insurer, 90% of the Cash Value is guaranteed under the UK Financial Services Compensation Scheme.

So frankly, I don't know of any similarly safe instruments to invest into Foreign Currency and I personally have invested close to S$200,000 into UK Traded Endowment.

[Alina]

Does anyone knows about how raising commodity prices affect NZD? I have invested in NZD and it has been making a loss. Though NZD has a strong correlation with commodity prices it has been going down despite raising commodity prices in the past. Really in a dilemna in cutting. Really appreciate it.

[yhendra]

Does anyone knows about how raising commodity prices affect NZD? I have invested in NZD and it has been making a loss. Though NZD has a strong correlation with commodity prices it has been going down despite raising commodity prices in the past. Really in a dilemna in cutting. Really appreciate it.

Hi Alina,

I do not know the relationship of those two things.
This is my stand if I were you:
1. The fact is I do not know how to trade in currency.
2. Now I am making loss.
3. What is my capital? Say $X.
4. How much loss I have made? Say $Y.
5. So, I will left with $Z = $X - $Y.
6. So many (abundance) good stocks still around in SGX, which have been discussed in this forum. With the current market sentiment (the last train as we call it) their upside potential can be in the range 30% to 50% at least.
7. So if $Z I invest in these stocks, will I at least recover from the loss ($Y) I made in the currency?

I am just sharing, you have to make your own stand and own decision.
Do your own homework. As I shared in another post, Taking Action is an important factor.

Hope the above can help!

PS: If you have not attended the Stock Workshop conducted by Dennis.
It is a good time to invest in yourself first.

[Alina]

Thanks yhendra. That is what I am thinking too. Forex is not my cup of tea and risks involved are too high. Though I was still hoping that now with the raising commodity prices it could result in higher NZD in 2011 instead of making a direct cut off loss.

[Trade2win]

I too had a bad experience with investing in foreign currency FD thinking of the tempting high interest rates compared with the pathetic rates in Singapore.
Many factors are beyond our control:
1. Market Timing - bought at height of the cycle in the exchange rate. Don't invest when it is at the historical high.

2. SGD strengthens at the time of maturity, you will make a loss on the exchange rate when trying to convert back to SGD. One must have a historical knowledge of the foreign currency exchange rate. Like investing in stock - buy low sell high. Don't just be enticed by the Interest Rates. Currency depreciation can happen both ways.

3. Many hidden costs in foreign currency investment. The Spreads between Buy/Sell price are high for retail investors. You are charged 2 times. When you invest and when you convert your investment back to SGD. The Bank also add in other admin charges, foreign cheque clearance charge, etc.

Generally, Australian and New Zealand dollars are linked to commodities like gold, copper, cotton, wheat, corn, etc. When commodities prices strengthen, these currencies will strengthen also. Usually they are traded in USD, so AUD, NZD & Commodities prices will have an inverted relation with the USD. So we also want to have an awareness of the strength of the USD. Commodities prices are also influence by the economic performance of the world, the weather and geopolitical factors. AUD is stronger than the NZD as Australia have more natural resources. AUD will perform better than NZD, the small brother always follow behind the bigger one. With higher demands from China/India and the global warming/weather uncertainty, commodities linked currencies will do better than SGD.

Sharing my 2 cents on foreign currency investment. Don't invest in something which we have little knowledge or have little control. Ask for expert advice, like Sifu Dennis.

[Dennis Ng]

Investing is about probability, not certainty.

UK Sterling Pounds trading at Historical Low (over 39 years) against S$ at about 1 Sterling Pound to S$2, vs highest range of S$3.5.

I personally think upside potential is higher than downside risks at such levels.

[Alina]

http://www.gocurrency.com/outlook-nzd-usd.htm

Like the Aussie, the New Zealand unit may benefit from quantitative easing by other central banks if those policies are mismanaged and produce ballooning inflationary pressure, making NZD attractive as a source of yield and as a store of value. For the moment however, we remain on the sidelines until a substantial imbalance is set to be exploited.

However, the strange thing I find is NZD forecast which I am not sure whether we could rely on in website shows it could reduced to almost half of USD. Wonder which is right.

[Trade2win]

Alina,
You are reading a review dated 7 April 2009. Currently the NZDUSD rate is about 0.7600 and NZDSGD is about $1.00. The strength of NZD is still good.

[Alina]

Thanks Trade2win. Noted the review was outdated. It appears that there is still potential for NZD to rise also now with rising commodities prices however I have been monitoring its movements for quite sometime noted it has been volatile with economy updates e.g QE1, China interest rate hikes, US employment rate, Euro crisis. Even though quantitative easing could result in possible ballooning inflationary pressure causing a yield to hold NZD, I find it difficult for me to monitor and predict on forex that I am not familiar with so finally decided to cut loss.

[wemakebread]

Hi Alina,

Since you have cut loss, try to review lesson learnt, and let go.
Don't keep looking back or hold on to emotional baggage.

Must look forward (like what Hendra helpfully suggested) and see what are the good opportunities NOW! There are several stocks which are discussed in this forum which still has good potential to go up.

These are a few which I am a bit more familiar with (though may not be the best) ... Teck Wah, Breadtalk, Auric, FJ Benjamin, Sky Petrol China, Sapphire Corp, Metro, Koh Bros, Citibank, Chip Eng Seng.

[eugenegohsk]

After seeing Dennis posting about Gerald Celente talking about the USD devalue by about 90%, I am thinking of closing my USD account that I have maintained for the past 2 years.

Can I hear some feedback about the USD and what is your views about it? Is there a way to use the TA to check this?

Thanks.

[archonmage]

After seeing Dennis posting about Gerald Celente talking about the USD devalue by about 90%, I am thinking of closing my USD account that I have maintained for the past 2 years.

Can I hear some feedback about the USD and what is your views about it? Is there a way to use the TA to check this?

Thanks.

Hi, Eugene.

As US prints more and more money, it's currency will definitely get weaker over time. It is a fact. Sadly, at times of market downturn, general view is that people will hold on to USD as safe heavens. The recent market weakness is a good example.

Personally, I do not encourage to hold on to USD. We never know when the dollar will crash.

The link below is the chart of USD against SGD. It is a classic downtrend.

http://sg.finance.yahoo.com/echarts?s=U ... ff;source=;

Regards,
a.m.

[eugenegohsk]

Thank you a.m.

I truly appreciate the generous sharing from every one in this forum. The old acronym that I get from TEAM is Together Everyone Achieve More.

Over here, the team we have is Together Everyone Accumulate Money.

[yhendra]

Thank you a.m.

I truly appreciate the generous sharing from every one in this forum. The old acronym that I get from TEAM is Together Everyone Achieve More.

Over here, the team we have is Together Everyone Accumulate Money.

Hi eugenegohsk,

I like that! Here you are, I beautify it for all of us!

TEAM = Together Everyone Accumulate Money