Wealth Diversification

MULTI-CURRENCY ACCOUNTS (MCA)

Every wise wealth manager will advise individuals to take their time and think through all major investment decisions. Measure twice, cut once is the old carpentry adage, but in the case of the GCR/RV, the opposite is true. Time is money… short and long term. So know that bankers and wealth managers alike will simply not have the time to answer too many questions or wait on clients to make decisions their attorneys tell them is acceptable.

The sheer volume of new clients expected to flood their banks is overwhelming during the first few weeks of GCR/RV redemption. Therefore, it’s wise to design your own in- bank wealth diversification strategy to prudently manage all your new, sudden and large volumes of liquidity.

Multi-Currency Accounts (MCA) are one proven way. They are sophisticated business oriented bank accounts typically for international account holders with multiple currency needs to service expenses. An MCA allows them to control liquidity all over the world from a core host bank near where they live. And though their wealth might be held in multiple foreign currencies, all are considered liquid assets in the US banking system, thus a bank can freely lend against them as if they were USD currency.

Clients generally diversify a certain percentage away from a core currency and diversify into other foreign currencies; thus hedging risk while still maintaining constant liquidity anywhere in the world. MCA’s are good at protecting principal if their bank’s host country’s suddenly has an economic melt down, as they need to move funds quickly without traveling out of the host country.

Also, MCA’s can be used an speculative investment tool by dividing up a core or host currency into several smaller, different emerging foreign currencies, thus diversifying wealth across more continents, countries and cultures.

MCA’s are a time tested and practical financial mechanism for accomplishing the goal of wealth diversification during your initial redemption appointment—especially for rookie investors because it’s as easy as opening a new bank account.

Plus, most major banks offer dozens of different currencies positions inside of your MCA, yet it is wise to go with established currencies with stable governments for the bulk of your funds, especially countries that have long histories of supporting their currencies with gold.

Below is a textbook wealth diversification strategy using an MCA, that in now way replaces a certified investment advisor’s counsel, but for the time being does allow you some diversification options in the 20 minute window you may have to redeem, and let you walk out of the bank with some peace of mind.