I’ve recently been contacted by a colleague who has asked me for my views on what they should do with the gratuity they are expecting to receive as part of their pension. Leaving aside equity investments, in which they are not interested, I would think the main risks they face are (a) currency risk, i.e. IE leaves the eurozone or the eurozone breaks up; and (b) counterparty risk, i.e. the institution with which they invest cannot meet its obligations. Assuming we are looking at a relative short term strategy until the euro debt crisis abates, I was going to suggest (a) investing most of their cash in short maturity German bunds that are trading at or below par (if any) and (b) a euro savings account in a DE or FR bank that did not fail the recent stress tests and is not particularly exposed to GR debt. I don’t think inflation is a major concern in this case in the short term. Essentially, the person is to receive a large sum in euro and wants to protect that sum in euro. Any alternatives /or suggestions for improvement on the above?