The plunging pound and record low interest rates that may sink even lower have punished any expat decision to stick money in the bank.
The top offshore rate is 1.4% for locking away £10,000 for a year with Skipton International.
Only three other banks and building societies offer rates that break the 1% ceiling – the rest are meagre returns of 0.9% or less.
With the pound sinking from $1.50 on June 23 to $1.31 on July 11, switching cash out of sterling to a safer currency haven is becoming a less attractive idea.
Meanwhile, the FTSE and other world markets have bounced to recent highs, so this may well be the time to switch from cash to stocks and shares.
The FTSE100 has hit the highest level since August 2015 at 6,698.92.
Why cash is a risky investment
Technically, the FTSE is now a bull market after gaining more than 20% since February – which means the trend is to rise.
Wall Street is also on trend with the Standard & Poor 500 and NASDAQ all hitting high.
For new stocks and shares, understanding investment risk is important.
Expats cannot lose the cash stashed in a bank, but they can see a drop in spending power as prices rise or the value of the pound drops against foreign currencies.
Economists call this a ‘shortfall risk’ when the amount of money someone has is not enough to meet their financial needs.
The same risk applies to stocks, shares and bonds as the value of an investment can rise or fall. Sometimes, investments are worth less than the price paid for them.
Spreading the risk
Diversification is the strategy to adopt to mitigate the shortfall risk.
Spreading the investment risk across companies in different markets and global locations reduces the chances of losing money.
In theory, if one market sector is struggling, another should step up to turn in profits that bolster the portfolio.
For sophisticated investors or those who can afford to lose money, high risk investments are available.
These include tax incentives for start-up and fast growing companies, crowdfunding and peer-to-peer lending. All advertise above par returns, but these new financial strategies are as yet untested in times of economic strife.