I have spoken to a lot of British people recently that either want to move money overseas, or invest in USD-based investments from the UK.
I have made an argument time and time again; politics doesn’t affect stock markets as much as the media likes to suggest.
They have gone up during periods of instability – the Cuban Missile Crisis, Trump’s election and government shutdowns as just three examples – and gone gown during other periods of uncertainty.
However, I do think the penny has finally dropped for more people. Namely, there is no such thing as a free lunch.
Many people assume that putting money in the bank is “risk-free”. It might produce less, much less in fact, long-term, compared to investing as per the figures below, but it is “safe”:
In reality, countless devaluations of the British Pound coupled with inflation, has lead to indirect losses.
When I travel around the world, from South Africa, to Brazil and beyond, the biggest regret I hear from investors is “not factoring in inflation and the possibility of currency falls”.
The Pound may, or may not, recover. What will never change is putting your money in the bank, is never a good investment.
If it was so good, why would the banks be able to make a profit from our deposits?