Time to invest overseas?

November 5, 2009 12:23pm

Interesting - the Bank of England just said it was extending quantitative easing which is no huge surprise. But one effect of this could be a further slump in sterling - meaning that investors might want to start looking at investing in overseas assets - if they haven’t already.

Actually, sterling has jumped a bit today because the market was expecting £50bn of quantitative easing and only £25bn has been announced. But Jeremy Cook, chief economist at World First, reckons they’ll announce another £25bn soon-ish - maybe by the end of Q1 next year.

So overseas assets could be an option for anyone who’s worried about sterling - at least according to David Kuo at the Motley Fool, who says: “The upshot [of today's announcement] could be a gradual slide in the value of sterling. Investors should therefore consider investing in overseas assets rather than scratch around looking for better savings accounts in the UK.”

If you don’t want to commit your money overseas directly, one thing investment advisers often suggest is buying international companies listed on the FTSE 100 that make a lot of their earnings overseas. That way you get the advantage of large cap companies with a bit of currency hedging too.