- Commodity booms are cyclical, and we were 9 years into one.
- The property's price had risen 4 times in 14 years, (non-mining) wages had only risen 50-100%.
- I was expecting a recession.
The last didn't happen, and I was 2 years early, but the decision proved correct:
Today I converted a significant amount of SGD to USD. This decision is a lot less certain.
Holding SGD is a little bit of a risk (not a lot), as its lumped with Emerging markets. The risk is if China devalues the Yuan significantly, due to capital flight and the unwinding of the carry trade puffed up since 2008 by endless rounds of QE, and they start to lose control (1) (2) (3). But holding USD is a risk if the US economy falls or if we get QE4....QE for-ever....
I don't know what will happen - Nobody knows nuthin'. But its too much of a risk to hold all my money in SGD, better to balance a little. Maybe I'm right. Or maybe I'm the last sucker to make this trade.
In the big picture, I'm still holding cash waiting for the stocks to fall. And still avoiding commodity currencies like the plague. Not trying to make money yet, just trying not avoid too much risk.
