How to take advantage of strong TWD

From my article:

Meanwhile, the value of foreign investor’s holdings of Taiwanese stocks, bonds, and Taiwan dollar-denominated deposits as of the end of September rose US$4.9 billion from a month earlier to US$489 billion.

USD 4.9 billion foreign investor money in 1 month.

From your article:

Taiwanese investors overseas have returned NT$210 billion (US$7.32 billion) to the island nation since August 2019

USD 7.32 billion in more than a year from Taishang. Not so much.

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Long overdue. Taiwan has always been a big big currency manipulator. The fair rate would be around 1:20 (and that is a significant risk premium built into it). It was easier before when Taiwanese economy looked like it is going the Japan way but now with Taiwan’s economy riding high and the rest of the world in deep shit it was not possible to suppress the exchange rate any longer. 1:26 in a year or two is very much possible imo.

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1:25~26 will keep away a decent amount of tourists following COVID-19 re-opening, which could be a good thing.

There’s no lack of tourists anyway.

Mostly semiconductor five g I would say.

This is why you need to adjust for purchasing power when looking at GDP.

Taiwan’s Central Bank is getting creative in trying to stop the appreciation of the TWD

I hate that. They try to make average Taiwanese poorer to keep the rich richer. Just let it go where it needs to go. The NTD is going up because Taiwan exports a lot of high value products like semiconductors.

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I’m also a bit skeptical. In my home country foreign currency investment products were a huge business for some time (banks and insurance companies were very good at selling them), but when the forex rates trend reversed due to a policy change in that foreign country, the customers were left holding the bag. The regulations are tighter now.

I would not recommend this kind of investment.

Besides they have been doing this forever, AUD was very popular a few years ago.

I read somewhere that forex is the most unstable investment you can make. Not even sure why anyone would because you’re better off investing in actual stocks or ETF’s than forex. Some big player farting the wrong way could cause exchange rates to change by a lot.

Short term forex plays can work well if you know what you are doing. But the article talks about life insurance, a long term commitment. In my home country they also sold mortgages in foreign currencies. You are committing to this product for 10 to 20 years. Imo nobody should do that. It’s way too risky and is packaged as being stable and a no-brainer.

given the transaction fees, and sell/buy rates always being enough that you always lose money converting back and forth, you have to be dealing in millions of USD to make money in the short term doing forex. Otherwise you always lose. And the change has to be pretty big to gain anything.

Are you guys even talking about the same thing?

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That would be a first on Forumosa.

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