Investing in time of crisis?

September 30, 2008

Ok , as my first post i am wondering how i should actually start. I was thinking about investment since the financial sector is in turmoil. Has anyone good ideas how we can make money at a time of coming recession? I know i do have one which i will share. Remember investment is not gambling and we are talking about taking some calcualted low risk getting returns that are very good. I am talking about 6-8 percent annual return with literally no risk.

I am talking about Australian dollars. Why Australian dollars? simply because i happen to stay in Australia for a while and have been making money out of it for the past 8 years. I know many of you guys must be wondering how could it be that easy. Australia is a large country south east of the map and boast a first class economy. The dollar is strongly influenced by commodities.

I try to make things simple. Looking at the site Yahoo Finance. Looking at the exchange rate many of us must be wondering how do we actually read the chart. Seriously if you are wondering how to read it than this investment is not right for you. I like to take Singapore dollars verses Australian dollars as most of my currency are mostly from either country.

What we are investing is in Australian TIME DEPOSITS. Time Deposits is just putting money in the bank, lending them for interest for a period of time. It is so simple yet many people are not sure whether to do it or what currencies to choose. I mean 6-8 percent annual return with very low risk is a no brainer but why is everyone so hesitant about doing it other than their own currency? by the way this is only suitable if your country currency time deposit is way lower than Australia. In SIngapore we hardly even reach 1 percent annual return for fixed deposits with a 1 year commitment but hardly anyone do it.  why? they wonder how can it be so easy to make money just by converting their money to Australian dollars. They also fear of the exchange rates or if the aussie dollar crashes.  

I can honestly say that when we are putting money in Australian time deposits we look only at 1 month at a time. Looking at Yahoo finance we can look that Aus dollar tend to rise and drop quite drastically about 3-6 months.Common sense tells us we should buy when it has a huge drop 4-5cents a dollar and sell when there is sharp increase like 10-12 cents a dollar. Mean while while waiting for changes you get 6-8 percent return or more. We actually have not added the gains when you sell the Aus dollar when it does really well.

In worst case senarios, you made a mistake and bought it high. Seriously if your country currency only give a poor 1-3 percent fixed deposit returns. Aus dollar interest rate of 6-9 percent returns would cover all the loses.

Lastly, keep in mind this is suitable for individuals who like low risk, quick liquidity in times of crisis and most importantly be able to leave their money in the bank for long periods of time without any commitment with the bank. This will allow you to sell and buy currency when the time is right. Take this as a retirement plan and savings for a rainy day.

So let us all start investing this simple method!

Check my website out if you want to know about investing in your health