Dropping pound . Is it time to quit the Euro Med

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Are you an expert?

[/ QUOTE ]LadyJessie and Lemain, I'm sure everyone here is fascinated to discover over several threads which of you is the greater 'expert'.

Can we all agree that no-one is to post on the forum who doesn't have and MBA, a PhD in marine engineering, a Yachtmaster Instructor Examiner qualification, AND has sailed at least three solo circumnavigations.

The rest of us will tiptoe quietly away and let you two get on with it.

/forums/images/graemlins/crazy.gif /forums/images/graemlins/crazy.gif /forums/images/graemlins/crazy.gif
 
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The rest of us will tiptoe quietly away

[/ QUOTE ]You do that. The vast majority of the population -- including Government -- have been 'tiptoeing quietly away' from this issue for at least four years, so you won't be alone.
 
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With the pound dropping down to almost below the Euro is it time to Quit the EEC .? Bot where would one go ? Africa?

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I am not an expert. But I think that sterling will recover against both the EUR and the USD. This is a short-term aberration. There are some other huge issues surrounding the 'Club Med' lands that are vastly more important than the rate of exchange.

Before making any suggestions, I'd want to know what you are looking for and to have some idea of your resources -- skills, crew, health, interests, timescales, etc.

Rates of exchange are going to be very volatile for some time. If you are planning to spend some time living in a country with a different currency to your own it is a fairly simple matter to buy that currency when the exchange rate is favourable.

Africa is not a good choice unless you enjoy a constant challenge.

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I wouldn't entirely agree with you Lemain, Morocco and Tunisia are pretty good for cruisers, currently, and prices there are cheap, for food and fuel.

However I found all that poverty deeply depressing - the world recession is probably going to have a far more unsettling effect on the Mahgreb (& Egypt) countries than on Western Europe. All of them are struggling with insufficient work for a burgeoning young population - most rely upon remittance workers in €uroland, all their governments are barely keeping the lid on simmering social discontent. I had some very illuminating discussions with (probably illegal) Moroccan and FEA youngsters, which confirmed the impressions I had from previous work we'd done, for the Commisiion, in those areas.

In fact the most challenging part of this Recession is the social unrest it is and is going to cause - leading to crippling increases in insurance premiums for those of us in the Med. We already see this in Greece and, in a different form, I'd be surprised if it doesn't rear its ugly head next in Italy.

WELCOME BACK TO SUNNY UK all you lot!!!
 
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[I wouldn't entirely agree with you Lemain, Morocco and Tunisia are pretty good for cruisers, currently, and prices there are cheap, for food and fuel.

[/ QUOTE ] I suspect that we think alike on this issue. I agree with the above but for the reasons you give (below) things will change for the worse. At present Morocco and Tunisia are (have been?) benefiting from spill-over from Club Med; now that Club Med is in steep decline I expect a mass exodus from most of the N. African projects.
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However I found all that poverty deeply depressing - the world recession is probably going to have a far more unsettling effect on the Mahgreb (& Egypt) countries than on Western Europe....

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In fact the most challenging part of this Recession is the social unrest it is and is going to cause - leading to crippling increases in insurance premiums for those of us in the Med. We already see this in Greece and, in a different form, I'd be surprised if it doesn't rear its ugly head next in Italy.

[/ QUOTE ]I agree. We are looking for an EU country in which to put down roots. We like Spain but I am very worried about the potential for social unrest particularly in the south where most employment has been tourism or holiday-home dependant for a long time.
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WELCOME BACK TO SUNNY UK all you lot!!!

[/ QUOTE ] I fear that the potential for social unrest is greater in the UK than most other places in the EU; Italy, Greece and Spain aside and I don't know about Portugal. I fear that the vast numbers of immigrants of very recent years have not had time enough to settle and when resources and jobs are in short supply (which they will be) there will be much resentment, and that will lead to anger and, potentially, street action.
 
ThanksLemain

for a very reasoned reply.

I liked both Tunisians and Moroccans, especially the youngsters, outgoing, interested and genuinely friendly, as you intimate I fear it may not last as the recession and poverty bite. However, in the next 12-18 months, I think it is unlikely to change dramatically - however after that it'll be an accelerating decline.
Don't think Club Med is relevant, they and the insulate tourists are unengaged with the locals. What we have to fear is the feeling of resentment engendered by a slow-down in world-trade and subsequent perceived local poverty.

If I were looking for an EU country in which to put down roots it would undoubtedly be France, significantly this summer I found prices in the Cote d'Azur and Riviera considerably cheaper than Italian mainland. The area I'd look at would be Catalonian France. Not particularly good sailing, but I made lots of good copains in the couple of hivernages I spent at Argéles, so I'm probably biassed.

Regarding social unrest - in ghetto areas, such as parts of the leeds-bradford conurbation, you may be right, but I think it would soon fizzle out - most Indian sub-continental immigrants are now into 2nd generation and remarkably well integrated. Brits tend to have a phlegmatic temperament and are unlikely to indulge in direct political action (more's the pity, a close friend was in the Sorbonne 1968 and lifted a few paving stones).

Fascinating as I find the mainland, I'm glad to retain my UK base!!

I fear we live in "interesting" times.
 
Re: ThanksLemain

We found Cote d'Azure and French Riviera far more expensive than Italy although it was much cheaper in Spain!

We sold up in the UK but could buy a 'base' tomorrow morning if we wanted to. At the moment 'bases' in the UK are losing their value so that seems to be a bad investment. Maybe we will -- who knows -- as you say, we are living in 'interesting' times. Nothing would surprise me at the moment other than pigs developing aerodynamic properties, perhaps!
 
Re: ThanksLemain

Ok experts all, we're about to join you in the Meddy, sold the house, boat's nearly ready, but what to do with our money? We have close to £200,000 and want to try and keep that intact as much as possible.
We've been to see a number of investment advisors and one we liked has proposed a well diversified portfolio, roughly split 45% Corporate bonds (investment ladder) 45% low/med risk investment grade equities, 9% cash 1 % higher risk equities.

Thing is, We're natrually nervous at the moment and not sure if this is the right time to go down this route. Should we leave the cash in the bank(s) for the time being (earning less and less each week) or get in there and buy while the market is down? How much further is it likely go?

Advisers may say now is a good time, but are they saying this because it is or because they have bills to pay?

Oh and while we're at it, who's going to win the 2.30 at Newmarket?
Answers on a post card please...............
 
currency futures

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Oh and while we're at it, who's going to win the 2.30 at Newmarket?

[/ QUOTE ]You have understood the issue. These are unprecedented times so no one can issue any forecast on where markets will go short term. Therefore, if you don't want to gamble; it would be wise to keep your funds in cash in a solvent bank. That means that you will at least not lose anything of your money.

If your investment horizon is at least 10 years plus; this might be an excellent time to invest in some stock market instruments. If you plan to go off sailing in the near future; that does not seem like such a good idea.

If you want to go off sailing in the near term then you need to ensure that your cash equity is in the same currency as you are spending. I.e. if you plan to cruise the Med, you need to invest your money in euros. If you are going off to the Carib and Pacific; then you should probably have your money in us dollars. The worst thing you can do is have your assets in pounds sterling and your spending in euros and/or usd. That will bleed you.

Again, I am not regulated to give investment advice; but I would keep my money in a bank in the same currency that I spend. Preferably in euros if I have a choice. Then when markets (hopefully) are restored to normality sometime in the future you should look into better investment opportunities. I don't think this is that time.
 
Re: ThanksLemain

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How does"Spending you way out of a financial" crisis work.
I'm really keen to try it after I get some "expert" advice

[/ QUOTE ]It's exactly the same thing as having a drink for an alcoholic going through detox. Short-term, it seems like a good idea. Long term, it simply compounds the problem.
 
Re: ThanksLemain

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We have close to £200,000 and want to try and keep that intact as much as possible.

[/ QUOTE ]I personally think that the GBP/EUR will recover but there are no guarantees of anything in the world today. You need to ask yourself whether you want to return to the UK or somewhere else. If you want to live in Euroland then maybe it's worth converting your GBP to EUR (though I would wait for a GBP rally). No shares yet. Bonds (especially US) are in a bubble that is about to burst or deflate. Cash is good. Gold is worth considering -- if a UK taxpayer then legal tender gold coins are CGT free (and all gold bullion is VAT free). Sovereigns might be a good investment for you. Also consider inflation-proof British Government bonds - not my field, others can advise.
 
Re: currency futures

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If your investment horizon is at least 10 years plus;

[/ QUOTE ]If your investment horizon is 10 years plus then you are grossly neglecting your investments, at this time. Today, there is no asset or asset class that could conceivably be prediced to be a 'good' investment, if purchased today, over that time frame.
 
Recent comparisons

September-October 2008

1. Marina fees
France
SNM Marseille €14.36/night
St Juan €25/night
Port Toga, Bastia €28/night

Italy
San Remo €52/night+shorepower
Varrazze €48/night
Genova, Molo Vecchio €58/night
Darsena Traiano, Fiumicino €25/night, concessionary rate from Fabio
Molo Manfredi, Salerno €38/night+shorepower
Marina Grande, Capri €100/night, but concession €35
Portorosa €44/night

Eating out in France was about 80% of the prices in Italy comparing 3* restaurants, you can, however eat far more cheaply and still well in 1* trattorii, in Genova the Ostaria Vico Palla was outstanding value for money, as is Sancho's Pizzeria Rustica takeaway in Fiumicino.
Supermarket and marché prices similar, if you got away from the tourist trail.

If you have cash €, I'd suggest waiting and seeing, I can only see asset prices continuing to drift down in the next 12 months.
 
Re: ThanksLemain

Hi, was the financial advisor you dealt with on commission basis or a set fee. My preference is to pay up front for the service as I believe it is more likely the advisor would give their best advice, rather than be tempted by commisions they would earn from any products recommended. That is not to say financial advisors on commission only basis would do this, but it would give you peace of mind.

As to investments, the reality is that all investment carries some risk. Even if you put it in a safe bank, with the current interest rates and cost of living your capital will be eaten away in real terms.

If you are keeping funds in for 5 - 10 years some exposure to the stock market may help prevent capital, depreciation, but it is a risk. Past performance is no guarantee of future performance but in the last 60 years there has been no 10 year period where the stock market did not out perform a deposit account.(same could be said for the housing market where there is no 10 year period where it has not outperformed the stock market) But you do need access to some readily availlable funds in an emergency and for general running costs. Your advisor does seem to recognise this and has suggested a balanced portfolio, where you can get easy access to some of your funds.

However you pays your money and you takes your choice. A famous investor (name escapes me now) does say you do not make lots of money by doing what every one else is doing. But you could well lose lots of money as well by following that strategy /forums/images/graemlins/smile.gif
 
Re: ThanksLemain

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Thing is, We're natrually nervous at the moment and not sure if this is the right time to go down this route.

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I buy when there is blood on the streets or panic in the air. Right now i feel the panic in the air and started buying 2 months ago. I move a set amount from my safe money to stocks every month. It will take me about 12 more months to move all my safe money in to stocks.

I sell when the stock market is doing great and everyone thinks it is a great time to buy stocks. Then I wait for the sheep's that runs after each other to run off the cliff. And the cycle starts again.
 
Re: ThanksLemain

I do hope that in 12 months you're not broke.
 
Re: ThanksLemain

Definitely not an expert but our IFA advised some 2 months ago to turn our bonds and a great chunk of pension into cash funds and thats what we have done. By doing that we have minimised our growth to a near zilch but the funds are away from any market losses.
When is a good time to re-invest, that's the million dollar (or euro) question.

I think this has been mentioned before on these forums, we use Nationwide debit cards for drawing local currencies. By using their debit card it gives us as near business rate as we think is possible to get, and without any withdrawal charges.

If any of the wizz kids out there has any better ideas I am sure we would all be very pleased to hear about it.
 
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