When to save in soles or dollars … It is a very good question and a really important decision to guarantee the profitability of your money. There are a couple of variables to consider.
When the dollar goes up, interest in buying more and more dollars goes off. Wouldn’t it have been better to buy before it went up?
It would be great to know the perfect time to buy
But it is very difficult. The dollar market is speculative and therefore uncertain. On Friday you can close down and Monday unexpectedly rise.
How to make the decision to save in dollars or soles?
These are the variables you can consider:
The level of risk
The first decision is to determine how much risk you want to take.
- A low risk level will indicate that it is safer to save in soles.
- The high risk, in dollars.
The profitability of the dollar savings is determined by the exchange rate, the price of the currency. You will win if when selling, the price of the dollar is higher than when buying.
In general, it is not easy to notice when it will go down or up; not even how much it will rise or fall.
Investment in dollars creates uncertainty.
Determining what you want saving for is key
Saving in dollars when you need to pay in that currency is a good idea:
- Buy merchandise abroad;
- Buy services abroad;
- Travel to the United States and countries whose currency is the dollar.
Thus, if saving happens within a period of time, you will surely buy dollars at different prices. It will be much safer than if you wait to buy dollars a few days before making the payment.
On the contrary, if you save to buy a car or real estate, it is more advisable that you make the savings in soles.
- You will always know the amount you have saved;
- You will not be subject to the sway of the dollar price. It would be terrible to sell dollars to close the business of your life just when the currency fell.
Saving in dollars as an investment is the most complex decision
Profitability is subject to the price of the currency, time and inflation. And the price of the currency depends on multiple external factors, impossible to control:
- The behavior of the economy in the United States
- The growth or decrease of China
- Currency flow to emerging economies
- The policies of the Fed (Federal Reserve System of the United States, equivalent to the Central Reserve Bank)
- Situations in Europe, Japan
- Oil price
- Speculation of large investors
However, it remains an interesting investment alternative. These are the two possible scenarios:
- Suppose you buy dollar at S /. 3.20 and the price is down. Your investment will be based on the expectation that, in the future, the currency will rise again. Probably a long-term investment.
- The second scenario is that you buy S /. 3.20 and the price is up. Your business is waiting for the price to continue rising.
The time for sale will be when the currency stabilizes at a higher purchase price. You will know how much you earned by subtracting inflation from profitability.
Investment in soles is always recommended. The investment in dollars must be part of a diversified portfolio. Dedicating all savings at such a high risk can be dangerous.