Cash Under the Mattress Returns…TAX FREE!
The purpose of this article is simply to show how to harness a return from a cash holding in various currencies. It does not take into account any investment returns in the currency countries i.e. no Cash, Bonds, Equity or Property Returns! Also not measured is the standard of living variances in these countries or any tax considerations.
A simple exercise reflecting the Rand depreciation against a basket of currencies and variance in inflation rates in the currency countries reveals returns that are not necessarily surprising but yet significant validation for geographical diversification in any investment strategy.
We compared hard-core currencies and inflation rate average differentials over the past ten years against the Rand and SA inflation. These would have been the AVERAGE ANNUALISED RETURNS if you simply held the cash in your pocket:
|United States Dollar||9.97%|