Quote:
Originally Posted by wind_magic
Now I have no idea what you are saying - I just told you, I did not say that stocks, houses, and labor were not better investments over that period of time, what more do you want me to say ?  |
Correct. In a statement where it looked like you were trying to make a statement that cash in the pocket was a good thing you went on to say these other things were better. I reacted wrong - sorry.
Quote:
Originally Posted by wind_magic
last week was a great time to own cash.
|
Is this supposed to be funny? Last week the S&P 500
grew by 1.44%, the DOW
grew by 0.44% and the NASDAQ
grew by 1.34%.
Now if you said last Thursday was a good time to own cash then I would have agreed.
Then you say the USD has declined by 30% in 2 years. Yes - the USD is declining - bad for those cruisers who are out there and didn't plan for this. But 30%? Really?
Probably a good comparison is the EUR which a currency for a major block of countries. In the last two years the dollar has declined against the Euro by about 12%. In exactly the same time period the S&P went up by 17%. So if Monsieur le Peu-peu converted his Euros to USD excactly 2 years ago, bought into the S&P and sold today, he wouldn't be too upset. When he realizes that EUR savings rates are less than 3% this would have been a smart move. Furthermore, the 2 year window is a particularly bad one as the S&P was on a local bump exactly 2 years ago and the dollar had some temporary strengthening. Choose 2.5 years for your analysis and Monsieur would have been very pleased with himself.
But this does raise an interesting point which is relevant to Sailnet. If you're setting off for 5-10 years based on your savings and are going to be living in many different countries, you are taking on significant exchange rate risk if all your savings are in USD. It might go up but it might go down. If your kitty is the right size, you might want to consider spreading it across a few currencies before you leave so your trip is not cut short. Course you'd feel bummed if the dollar strengthened.