Risk And Reward

Whether you’re on a tight budget or have some wiggle room, it’s wise to play the currency market as it could save you a lot of money

- Dan Waterman

When speaking to new clients, one of the very first questions we ask is ‘What is your risk appetite?’

The answer will determine what action you should think about taking, when entering one of the most volatile and unpredictable markets in the world. Unfortunately, you will not get asked this question by your high street bank, and that may have a huge effect on your pocket.

Why? Well this will lead most people to exchange into euros when it is needed, leaving them exposed to currency fluctuations during that time. More often than not, it will end up costing them a lot more money than they originally budgeted for. Once you have found a property to buy and contracts have been signed, it’s important to make a game plan as soon as possible. The below may help in what action to take.

Low risk takers: Those on a tight budget or who simply do not want the headache of currency risk, should think about exchanging what they need straight away.

Medium risk takers: Those who prefer to ‘not put all their eggs in one basket’, should think about exchanging some initially and then set reasonable rate alerts for the remainder.

High risk takers: Those with flexible budgets or longer deadlines could adopt a ‘wait and see’ attitude and exchange bit by bit to hedge their bets.

SPEAK TO SPECIALISTS

Generally, people will contact an estate agency to help them find suitable properties to buy. They will choose a solicitor for advice and to look over contracts. Then perhaps they’ll find a mortgage and removal company if required. All are experts in their own fields, who will take the stress out of that particular job for you. However, still three out of 10 people will think of their high street bank first when it comes to exchanging currency.