In a world where the news cycle is continuous, each minute we are greeted with increasingly dramatic stories that bring change to our lives â€“ for better or worse. These sometimes surreal and complex plot lines which we call "reality"bring with them endless surprises. Some might indeed say that we live in uncertain times, to the extent that it is dramatically affecting our financial outlook.
The big question is, how can we manage this volatility to feel fiscally empowered in such unpredictable times? Do we speculate and strategize, or stand by optimistically?
When things become unclear, it is often considered wise to prepare for the worst â€“ just in case. This is repeatedly advised by gurus and mentors â€“ from Spencer Johnson, author of "Who Moved my Cheeseâ€, to journalists writing for the Harvard Business Review. When we commissioned our Brexit survey with YouGov this year, it revealed that British expats are indeed doing just that: Taking matters into their own hands, by switching banks, revising their retirement plans, or even applying for permanent residency in their current country. In fact, nearly a quarter of British expats based in Germany looked to move their savings out of the UK â€“ all to prepare for the unknown outcome of Brexit.
It has also been suggested that personality traits are a factor in how people financial plan in these uncertain times. Pre-empting what's to come and taking action to try to manage all possible outcomes is one possible way of limiting the grasp external factors can have on your financial comfort.
Business as Usual
While some individuals pay close attention to the latest news and how it may affect their financial wellbeing, others see these developments as part of a larger pattern of constant â€˜uncertainty'. This is the view shared by Andrew Hallam, author of "Millionaire Expatâ€. In a recent speaker's session we held with Hallam on this very subject, he observed:
I find it very interesting that people talk now about these uncertain timesâ€¦ There has never been a â€˜certain time'. But because of the availability heuristic, we take whatever is happening right now and we believe it is the biggest and worst calamity that has ever occurred.
Hallam describes the availability heuristic as the "over-emphasis of importance of whatever is happening in the world at this moment in timeâ€. He claims that while being prepared for the worst can be helpful, the actions and behaviours spurred on by the "availability heuristic"can sometimes cause damage to financial assets, like investments. Hallam believes that by "keeping calm and carrying onâ€, we may get a better return than by going off-course and changing our game plan, in the long-run. While political and economic climates will fluctuate on a regular basis, the gains to be made in solid investments could lie within the bigger picture - how an investment portfolio looks after thirty years rather than after one, for example. Looking at current affairs in this way can also help us to understand that conceptâ€“thirty years from now, a generalised progression could stand out to us, rather than the hourly ups-and-downs of the news cycle.
However no one can truly estimate what this progression will look like, according to experts like Hallam.
Rising above Uncertainty in Foreign Exchange
Here at CurrencyFair, we deal in the business of foreign exchange, which will always be affected by that very element of uncertainty: Global tensions rise and fall, national elections come and go, and with that, the foreign exchange rates fluctuate. These days, headlines are even structured around how the story is affecting the local currency. But what if it were possible to manager the unpredictable peaks and troughs of the currency markets?
Foreign exchange can be one area of finance that leaves people feeling out of control. One way people might be able to regain that control is via the CurrencyFair Exchange, regardless of the headlines. Here, our customers can request an exchange rate and match with a peer at that rate. Meaning some customers may be able to match at exchange rates better than what is on offer in the currency markets.
CurrencyFair supports customers who are trying to negotiate market volatility and the outcomes of this political and economic events. In times of unpredictability there are widely varying approaches to managing finances. One certainty is that sending money overseas with CurrencyFair means currency exchange without compromise.