Long Term Dollar Decline and Living Outside the US

[alaska55]

Quote:

Originally Posted by Bryan Barnfellow I think you are misunderstanding this. You said in your response that rates go up and down, implying there was no need to be concerned. I showed you a chart which, over 40 years, shows short term ups and downs along a decidedly long term down trend; i.e., 4.38 CHF per 1 USD in 1970 vs. .97 CHF 40 years later. The chart illustrated that simple reality. I picked the first chart I found to illustrate my point about short vs. long term trends. In any case, the last 5-6 years are immaterial...short term noise. The exchange rate (USD:CHF) was 1:.97 on January 3, 2011. It went up and down over the intervening years (as low as .84 if I remember correctly and up above parity at times) and is now 1:.98, virtually the same as where it was in 2011. The trend from 4.38 to .98 has not been broken, do you see? My last two years of experience in retirement aren't as important as my next 30. In this case the old adage, "the trend is your friend," doesn't apply to me! Hope this makes it clearer. Thanks. -BB

I'm not misunderstanding any thing, for 7 years you have a trend of higher highs and lows, all which started about the time the US and Swiss started serious talks about their banks. I'm not going to say much about the Swiss but they have dark history and its not pretty like their landscape.

[FUEGO]

Invest in more foreign investments? Something like Vanguard VXUS. Should give you a nice hedge against USD growing weaker long term.

[Sunset]

Quote:

Originally Posted by Bryan Barnfellow We rent...we could never ever afford to buy our place, even if it were for sale. This is true for something like 60% of the Swiss...all renters. ...... BTW, landlords cannot raise rents unless there is serious inflation/interest rate rises or they do some renovation in your flat or house. So, our rent hasn't changed in almost 8 years. Our next door neighbor said hers hasn't been raised in over 20 years (!). And if interest rates go down significantly the renter has the right to request a decrease in rent. Another problem: the longest fixed mortgage is only 10 years, then you have to renegotiate new terms at the current interest rates. So, there is some risk there....... We have considered buying some real estate here and renting it -- like a studio apartment (only about 400K-500K CHF gulp); but it is complicated, even with permanent residence permits, which we now have. And, we don't want to get new jobs as landlords! -BB

I view it's bad for landlords that they cannot raise the rent, as even 1.5% inflation per year over 20 years is well over 30%.
So it would be bad for you to become a landlord as landlords must have a tough time there.

[Alan]

Quote:

Originally Posted by haha First, I am not critical of what you said. I just could not parse the sentence structure. What is the difference between a share fund and a stock fund and a share fund fund? Ha

My bad, sorry about that, the common terminology here is “stocks and shares” ISA’s and I didn’t even get that wording right. An ISA is the UK equivalent of a Roth but the IRS does not recognize the pension wrapper and taxes the gains as they are produced. (I have a cash ISA and as interest accumulates free of UK tax I still pay US tax on it)

10 steps to finding the best stocks and shares Isa - Which?

I am also a regular user of Transferwise to transfer funds which matches those who want to sell with those who want to buy to give very low forex transfer fees. I have an HSBC account in both countries and transfer money either way in minutes at good rates but still prefer to wait a few days for Transferwise to do its thing.

[haha]

Quote:

Originally Posted by Alan My bad, sorry about that, the common terminology here is “stocks and shares” ISA’s and I didn’t even get that wording right. An ISA is the UK equivalent of a Roth but the IRS does not recognize the pension wrapper and taxes the gains as they are produced. (I have a cash ISA and as interest accumulates free of UK tax I still pay US tax on it) 10 steps to finding the best stocks and shares Isa - Which? I am also a regular user of Transferwise to transfer funds which matches those who want to sell with those who want to buy to give very low forex transfer fees. I have an HSBC account in both countries and transfer money either way in minutes at good rates but still prefer to wait a few days for Transferwise to do its thing.

Thank you Alan. I thought it must be some U.K. structure but did not know what.

Ha

[tmm99]

Bryan,

The exchange rate fluctuation is also my concern since I have 90% of my assets in USD, and I live in Canada. The exchange rate has been in my favor for the last couple of years ($1 USD worth about $1.20-$1.35 CAD), but CAD has been slowly rising. Only a few years ago, $1 USD was worth $0.98 CAD, so we'll never know how far CAD may rise.

I don't have a good solution to this dilemma. I initially moved about 10% of my asset to CAD and invested, but I don't want to move much more due to tax implications. I will move some more USD to CAD when my US CD's mature (if the rate is still favorable.)

All I am doing right now is to make sure my spending budget is low enough that I can weather the storm when and if it comes.