Anyone following the currency markets – or even just the news – will be aware of the recent fall in value of British Pounds Sterling (GBP) against the US Dollar, which at the time of writing is a total fall of 18% since the UK voted in a referendum to leave the European Union.
People who are very GBP focussed, who are not specifically worried by the exchange rate, but note that the UK stock market is moving inversely to the currency rate – when one goes down, the other goes up. For those who have made paper gains as the markets have risen, will this mean that the markets are likely fall if/when the currency rebounds?
c) If GBP falls further, those who convert still make a healthy profit from an unexpected event. Not as much as if they could have if they hung on a little longer if this happens, but still a great return – is it worth risking?
Although the above example relates to luxury goods, the same principle applies to savings and investments – you often have the chance to buy the same thing from a variety of places, at a variety of prices. Could you be getting a better deal?