Wealth preservation and the US$

S

shambo

Guest
Hi,

As most people know, the time for a further US$ slide is getting nearer..

To be short(and hopefully not sounding conceited) about it I have a few million dollars I need to protect but I also need as much as possible for working capital(all in the United States).. I already do futures/futures options trades on gold/silver and various other commodities which is mitigating the problem but even this won't be enough if there's a 'sudden' large drop..(I'm comfortable doing these trades and it helps that I have my risk spread across a number of trades at the same time unlike the Forex option below)

There's only two ways I can see of getting around this:

1) Forex and by extension very high-leverage and maintenance margins which I wouldn't be totally comfortable doing (myself at least)

2) If there is some institution where I can buy hard-assets(gold/silver) or foreign currency and borrow against it in dollars at a decent rate


Can anyone give me some leads on the who/where/how of either of the two above or any other angle? My preference would be number 2. I'm very conscious of avoiding the average 'financial advisor' for obvious reasons -- I need someone I know can deliver. Any and all help would be greatly appreciated -- it seems it's as hard to hold onto wealth as it is to get/make it!


RD
 
shambo said:
As most people know, the time for a further US$ slide is getting nearer..
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Do you mean that some (most?) people have learnt how to predict the future? Why wasn't I told!?
 
You can insert 'some' if you like..

Either way, you only need to look at imbalances, yield curve, US consumer spending abilities almost maxed-out, US real estate bubble, US rate hikes nearing end of range without putting economy in jeopardy vs. Euro and other currencies only beginning to hike, potential for oil to be priced in Euro soon, gold/silver increases, geopolitical tensions, Chinese diversifying out of Treasuries, US war-debts and by extension dollar inflation, etc., etc. and it's as certain as it gets..

My aim is not to predict, it's to hedge and have the odds on my side.. much like good poker players use odds to win more often than 'luck'
 
From your post you seem to have sufficient knowledge and are doing the right things to protect yourself. Im not sure what anyone could advise.

The US$ has troubles, but its not going to zero value. But if you think it is then why not spend a large whack on an end of year call on GLD? Or why not buy a marginable prec metal mutual fund and borrow against it?

If you think armaggedeon (sic) is around the corner I'd buy a house with high walls in the mountains of washington state, stock it with food, water and gold coins, buy a serious weapon and ammo and learn mandarin while you wait it out. When the dust settles you can swap your gold for yuan :)
 
Dunno much about this area but couldn't you buy FX call warrants for euros for example? Doing a google immediately threw up prices from UBS but the expiries were relatively short term - six months or so. I guess you could rehedge again after six months or look around for longer term options. It would seem to me to be a relatively "pure" way of hedging against dollar falling without tying up a large amount of your money in fx deposit accounts or gold. It should be easy enough too to do the rough calculations on how many options you require to protect yourself (and how much the hedge will cost).
 
shambo said:
To be short(and hopefully not sounding conceited) about it I have a few million dollars I need to protect but I also need as much as possible for working capital(all in the United States)..
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Assuming that you do in fact have a few million dollars. Given some of your other posts here, you're other activities regarding finance don't really indicate the actions of someone so flush with millions of dollars.

http://www.askaboutmoney.com/showthread.php?t=9094
http://www.askaboutmoney.com/showthread.php?t=13271

If you really do have a "few million dollars", don't you have an investment bank or a financial advisor or someone already looking after you and your millions?
 
ronan_d_john said:
Assuming that you do in fact have a few million dollars. Given some of your other posts here, you're other activities regarding finance don't really indicate the actions of someone so flush with millions of dollars.

http://www.askaboutmoney.com/showthread.php?t=9094
http://www.askaboutmoney.com/showthread.php?t=13271

If you really do have a "few million dollars", don't you have an investment bank or a financial advisor or someone already looking after you and your millions?
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I do not see anything in these treads that would indicate that we are talking to anything other than a person who is carefull with their money. Just because you have money does not mean that you are prepared to waste it.
As for the financial advisor crack. He/she did not win the lotto and if you build up your asset base slowly you learn as you go along. Advisors are leeches. You do not get to be wealthy listening to advisors.
 
woods said:
I do not see anything in these treads that would indicate that we are talking to anything other than a person who is carefull with their money. Just because you have money does not mean that you are prepared to waste it.
As for the financial advisor crack. He/she did not win the lotto and if you build up your asset base slowly you learn as you go along. Advisors are leeches. You do not get to be wealthy listening to advisors.
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I agree with Woods. In fact those earlier threads by Shambo kinda support his claim to having the sort of wealth the precludes having to work for a salary. From my experience, people who've accumulated wealth through hard work and diligence (as opposed to lotto/luck/inherit) know the power of money and are PRIMARILY concerned with preserving it.
 
Thanks woods -- it's sad to see responses like those above -- I merely and reluctantly mentioned there was a substantial amount involved so any would be helpful respondees would know where I was coming from.

I could explain myself and the threads above but why should I or anyone. Not everything is ever as straight forward as one thinks it should be, millions or no millions.

No, I haven't an investment bank or advisor to date -- as woods said they're generally leeches which is why I'm looking for angles here albeit a long shot. And why look for advice on US matters in Ireland -- because in the US it's hard to know where to go for anything -- it's vast and Irish tend to be knowledgeable!

Anyways, I'm obviously barking up the wrong tree..


Thanks to all with positive answers.


PS - I can't understand why anyone would think I'd bother lying anonymously.
 
shambo said:
Thanks woods -- it's sad to see responses like those above -- I merely and reluctantly mentioned there was a substantial amount involved so any would be helpful respondees would know where I was coming from.

I could explain myself and the threads above but why should I or anyone. Not everything is ever as straight forward as one thinks it should be, millions or no millions.

No, I haven't an investment bank or advisor to date -- as woods said they're generally leeches which is why I'm looking for angles here albeit a long shot. And why look for advice on US matters in Ireland -- because in the US it's hard to know where to go for anything -- it's vast and Irish tend to be knowledgeable!

Anyways, I'm obviously barking up the wrong tree..


Thanks to all with positive answers.


PS - I can't understand why anyone would think I'd bother lying anonymously.
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I spend most of my surfing time at www.greenenergyinvestors.com
I think you'll find likeminded souls there.

The commodities, energy and prec metals story is still not a "page 1 story", and I'd say renewables (the next frontier) are even further off the radar. I've made frankly outrageous returns in the last 2 yrs investing (40%+ p.a.) along these lines as discussed in the above forum. There's also intelligent discussion of shorting/putting the DOW and US$, and discussions on shorting opportunities for UK builders etc.

As Woods implies the best financial advisor is YOU. This is both liberating and daunting, but good luck.
 
I am always concerned when folks say $ is a goner.
When the "conventional wisdom" says one thing I always want to know the contrarian view on this.
As a high nett worth investor do you need to take significant risks?
Why not buy the markets.....get your 8% odd per annum and not try and time the market?
 
Sorry - I find it at hard to believe that somebody with "a few million dollars" would be wasting their time asking for investment advice on a public/voluntary website.
 
True
However it is hard to get best advice even having a good standard of living.
One gets so many potential investment letters and cold calls etc so in a way it does not surprise me.
AAM is independent with no vested interest.
I would say there are members on AAM with a few million also but probably in bricks and mortar as is customary with the paddy!
 
walk2dewater, I agree with what you have to say and I'll look over that website -- thanks.

markowitzman, I could take 8% a year but then again the dollar exchanged for ~0.85 back in 2001-2002 if I remember correctly and is exchanging for ~1.2 (was 1.4 in between) now -- that's a big loss of purchasing power that could have been avoided. Also, I do it out of interest and I've been making good returns so why not. As for the dollar, I'm not saying it's a goner(it's the reserve currency and Bretton Woods II and current world fiat currencies arguably depend on it -- it might have to be backed by gold again at some point in the future) , but it has a lot of things against it right now and you only have to look at how much it's devalued over the last 80-90 years and why to see where I'm coming from).

Clubman, there are lots of millionaires out there, esp. in Ireland these days -- I think there are something like 9-10 million of them in the US (I could be corrected). And they're generally just ordinary people and keep their heads down. Rightly or wrongly, I was just asking if somebody(I know there are a number of professionals on this forum) had any leads. One of the reasons I've never needed an investment bank or anybody else is because my money has always been in my business(that is why I mentioned I needed the money for working capital and partly why my preference is not Forex but cheap asset backed loans).


I seem to have ruffled people more than anything else -- I've learned not to take this approach again and think the thread should probably finish :)
 
If the OP knows the dollar was guaranteed to slide all he has to do is short the dollar and make even more millions depending on his leverage.

However...

ClubMan said:
Sorry - I find it at hard to believe that somebody with "a few million dollars" would be wasting their time asking for investment advice on a public/voluntary website.
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Why nor? Are you suggesting that AAM is only for working stiffs? What's a few million bucks these days - a semi-D in Dublin 4? Don't kill the guy for just asking!
 
It's not as simple as just shorting the dollar unless you get the timing right vs. your allotted capital -- that's why Warren Buffett lost on his last round of Forex bets against the dollar(although he gained millions over the last few years) -- which is why I'm not comfortable doing highly leveraged Forex on which you have to maintain margins(I need the working capital). As for options they are time-valued and expire and also require a lot of capital tied-up. Both are too risky for what I want.

So it's back to hard-assets I know will go up over time like gold/silver or a basket of (commodity)currencies against which I can borrow in dollars at a low rate -- yes it costs money to do this but so does any hedging and if I'm right my main money is protected and I can make more off the loan money at the same time. My problem is finding what institution would provide this service. I've talked to some already like [broken link removed].
 
1) Forex and by extension very high-leverage and maintenance margins which I wouldn't be totally comfortable doing (myself at least)
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Not sure what you mean by not being comfortable with maintenance margins?
 
My question was why you weren't comfortable, but I think it's because as you pointed out you need the working capital.

Leverage is a big advatage of FOREX though. You could have an open position of $1 million at low 10:1 leverage for $100K. Would take a about a 5% increase in the dollar against other currency for a margin call. That would be around the 1.15 for EUR/USD.
 
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