I'd like to ask an investor group in another hemisphere for their prospective and suggestions on where they might place their retirement funds in these troubled times. I'm a US citizen living near Boston who retired this past week and received my retirement package check that I placed in my newly opened brokerage account. I plan to live off these funds of about $350K US, all I have, for hopefully several years by finding appropriate investment vehicles for income and slowly drawing down the base funds as needed to live simply. My situation is just like other retired folks are faced with around the world and you will likely also have to deal with someday. However, nothing is simple and straight forward especially with today's international events taking place. I know that I am not a sophisticated investor but have dabble without much success speculating over the years.
Question: how would you protect your retirement funds from 1. Currency Devaluation - in my case, the shrinking USD which decrease in value may be greatly accelerated, and 2. Selection of what kind of Investments should be purchased and in what currency on what exchange over the next 18 months? Let me add a twist and a little spice to this mix that has been keeping me up at night.
I predict that a Israel (USA likely implicated by reference and/or deed) sparked war with Iran will occur shortly driving Oil prices out of sight and impacting world supply. I had a taste of what it means to have oil shortages and high prices in the USA during the 1970's and what it meant to everyone then. Today, I hesitate to predict what such would do to a very unprepared and unaware USA, but I will say it will not be pretty, IMHO. Further, PeakOil conditions could be accelerated during and after the Iran events which will pose a international dilemma of near Biblical proportions. Please consider war actually happening in the face of all the great arguments that it will not happen and oil pricing will be $100+ a barrel. I strongly feel these evens will cause the USD to free fall against world currencies like has never been seen before.
So, just fantasize for a moment that you have just retired. How would you handle your very own AUD funds if the AUD was under attack in a similar fashion as the USD? Does it matter what currency - AUD, EURO, USD , etc. you keep your investments and funds in? Which world currency will have the best benefits in the war scenario I foresee? What investments might you make? Should you buy domestic or international securities and of what kind? Should the Energy sector be avoided or highlighted? What part should Gold and FX play in the strategy? Which exchange would be best to use for purchasing investment instruments - USA, ASX, London, Munich, Toronto, etc.? Is it important which country your chosen investments administrative home office has its headquarters in - Australia, Brazil, China, etc. or in what currency the investment is bought in? I am still unclear on and wonder what would happen to a foreign investments value if you buy that foreign security traded on your local exchange in you county's currency. What are the ramifications to the value if deflation occurs? What have I forgotten and not taken into consideration? I have so many question and so little time. I ask for your Aussie opinions, comments, and help that I will factor into my strategy for investment direction and venue for my financial future. Never did I think I would have to be a international economist, scholar and wizard to retire and survive.
Thank you all in advance for any comments and opinions you may share.