Iran dinar

[burt gummer]

I know his isnt a survival or prep qurstion but a friend has bought large amouts of iran dinar hopeing it re values and then he can buy what he wants for prepping/ survival, is there any chance its gonna work for him or did he just waste his $$$$$

 

[slimplmbr]

I have a friend that did this also in hopes that the dinar would re-value. I did some looking online and most signs pointed to it being a waste of money. I could be wrong or right, I don't know. I just didn't feel it was a good investment.

 

[burt gummer]

Yeah, well i hope it does for him he deserves some good things.

 

[Libertarian01]

Burt (et alia),

It will depend upon how fast the Rial recovers.

All investment is a risk / reward equation. ALL INVESTMENT!

People forget this.

If you go to XE.com and check out their currency charts you will find that about five (5) years ago the Rial was at about 9,323 / $ on 16 Oct 2007.

Let us presume that the world changes and five (5) years from today it returns to exactly where it was five (5) years ago.

So, invest $1,000 today and you buy 12,287,000 Rial. In five (5) years, going with the previous assumption, it will be worth (12,287,000 / 9,323) = $1,317.92. This is an increase of 31% over five (5) years.

NOTE: This does NOT include losses for currency exchange rates.

So, you decide. Is this a good investment?

What if their government falls?

What if the Green movement that started a few years ago gains momentum and begins major reforms?

What if Israel does something short sighted and attacks?

What if, what if, what if...?

All investment is risk / reward. The real question is: Do you believe the Rial has bottomed out and can only go up? That is the time to buy.

Regards,

Doug

 

[NathanJefferson]

Did he buy actual physical script? If so he probably can sell it on ebay as a collectible/gift/etc.

If not he is probably SOL. There isn't a currency in the world I'd invest in right now. When you invest in a fiat currency you are just hoping the invested in currency depreciates slower than the other currencies around it. So in the previous example; if it DOES go back to 1317$ worth 5 years from now - how much would those dollars buy you in 2017?

Invest in productive assets or tangible goods that hold value.

Except for maybe the singapore dollar I can't even fathom investing in an international currency.

Edit: Disclaimer: my post is just hypothetical and should in no way be taken as actual investment advice.:-D

 

[burt gummer]

I forget how much he bought but ill try to get him to sell it, he needs $$$

 

[Libertarian01]

Did he buy actual physical script? If so he probably can sell it on ebay as a collectible/gift/etc.

If not he is probably SOL. There isn't a currency in the world I'd invest in right now. When you invest in a fiat currency you are just hoping the invested in currency depreciates slower than the other currencies around it. So in the previous example; if it DOES go back to 1317$ worth 5 years from now - how much would those dollars buy you in 2017?

Invest in productive assets or tangible goods that hold value.

Except for maybe the singapore dollar I can't even fathom investing in an international currency.

Edit: Disclaimer: my post is just hypothetical and should in no way be taken as actual investment advice.:-D

Rgoziner,

I see your point that does need to be taken into when discussing values, but I disagree that it is necessarily relevant to investing.

No matter what we invest in inflation will take a deleterious toll on our buying power. It is an environmental constant that will affect everything we invest in!

Say for example I invest in a tangible asset of guns. I invest $1,000 in firearms. In five years they are worth $1,250 on the open market, so my investment has increased by $250. What that total value of $1,250 will buy if sold due to inflation in 2017 terms does not matter. I would face the same question if I invested in mutual funds, stocks, foreign currency, gold, silver, everything!

Now some investments are overall better than others as they may grow tax deferred or even tax free, so the $1,000 investment we make today will have a markedly different yield from one choice to the other, but the buying power is not relevant as we will all face that issue no matter what we invest in.

The buying power does need to be factored in when setting a goal for buying something or maintaining a standard of living, so do not take this as my blowing off the concept. It is one (1) of the many variables that should be looked at when planning to invest long term.

As to your point of "invest in goods that hold value" I agree that investments such as these should be part of a portfolio. They should actually be the foundation of an investment portfolio. However, we are then trading off potentially higher yields for the "safer" investment of "holding value."

This is why good investment advisers need to know a heck of a lot about the person they are advising. While a 25 year old client may be able to accept greater risk in growth stocks and survive an economic downturn over the next 40 years, a 60 year old client would not be a good candidate for taking the risks, as their time is much more limited and the potential negatives would have a greater impact.

As an afterthought what is truly important is what the friend is investing for!!!???

Is he 30 years old and investing for retirement? If so, then I might venture to guess that investing $5k in the Iranian Rial is potentially a great deal: it is extremely cheap and has a great growth potential in 37 years when the friend will be able to retire with full SS benefits, presuming SS still exists.

However, if he is wanting to invest some money now and make a great return in a year or two then my highly unprofessional opinion is "no way in Hades." The current scenario with Iran is unstable on multiple fronts and while I am a great supporter of the Iranian culture having faith in its secular and moderate society, it will take many years, perhaps decades even, for this group to move in a stable direction.

Regards,

Doug

 

[NathanJefferson]

Rgoziner,

I see your point that does need to be taken into when discussing values, but I disagree that it is necessarily relevant to investing.

No matter what we invest in inflation will take a deleterious toll on our buying power. It is an environmental constant that will affect everything we invest in!

Say for example I invest in a tangible asset of guns. I invest $1,000 in firearms. In five years they are worth $1,250 on the open market, so my investment has increased by $250. What that total value of $1,250 will buy if sold due to inflation in 2017 terms does not matter. I would face the same question if I invested in mutual funds, stocks, foreign currency, gold, silver, everything!

Now some investments are overall better than others as they may grow tax deferred or even tax free, so the $1,000 investment we make today will have a markedly different yield from one choice to the other, but the buying power is not relevant as we will all face that issue no matter what we invest in.

The buying power does need to be factored in when setting a goal for buying something or maintaining a standard of living, so do not take this as my blowing off the concept. It is one (1) of the many variables that should be looked at when planning to invest long term.

As to your point of "invest in goods that hold value" I agree that investments such as these should be part of a portfolio. They should actually be the foundation of an investment portfolio. However, we are then trading off potentially higher yields for the "safer" investment of "holding value."

This is why good investment advisers need to know a heck of a lot about the person they are advising. While a 25 year old client may be able to accept greater risk in growth stocks and survive an economic downturn over the next 40 years, a 60 year old client would not be a good candidate for taking the risks, as their time is much more limited and the potential negatives would have a greater impact.

As an afterthought what is truly important is what the friend is investing for!!!???

Is he 30 years old and investing for retirement? If so, then I might venture to guess that investing $5k in the Iranian Rial is potentially a great deal: it is extremely cheap and has a great growth potential in 37 years when the friend will be able to retire with full SS benefits, presuming SS still exists.

However, if he is wanting to invest some money now and make a great return in a year or two then my highly unprofessional opinion is "no way in Hades." The current scenario with Iran is unstable on multiple fronts and while I am a great supporter of the Iranian culture having faith in its secular and moderate society, it will take many years, perhaps decades even, for this group to move in a stable direction.

Regards,

Doug

All valid points.

But on another hand - if someone has to ask if a FX investment is good, the answer for that person is a resounding "NO!".

FX trading is more cut throat than stocks. Not to mention I'm sure the US .gov and many others are trying their darndest to kill the Iranian currency, so you are betting against some pretty big powers.