One of the most common questions financial advisers hear from clients is: “When is the best time to invest offshore?”

Almost invariably, this is followed by a discussion about the strength or weakness of the rand.

While currency levels understandably influence investor sentiment, trying to time exchange rate movements perfectly is notoriously difficult — and often distracts from far more important considerations. In many cases, waiting for the “ideal” time to invest offshore is simply another form of attempting to time the currency, something that even seasoned professionals struggle to do consistently.

A more effective approach is to shift the conversation away from short-term currency movements and towards what truly matters: whether offshore exposure supports a client’s long-term objectives, how that exposure should be structured, and how it fits into their broader financial plan. When the focus moves to the factors within an investor’s control, offshore investing becomes less about speculation — and more about strategy.

Do your clients’ needs include offshore exposure? There will be periods when the currency is undervalued, and likewise, periods when it is overvalued. Waiting for the best time to invest offshore is sometimes just a different way of saying that you are trying to time the currency.  

To manage currency risks effectively, investment platforms and authorised forex dealers offer various tools. For instance, with the Momentum Wealth International platform, clients can phase in their investments over time, thereby reducing exposure to market volatility. Forex providers also offer tools such as forward contracts, which lock in exchange rates for future transactions.

The exchange rate is just one of the considerations to look at when investing offshore, but it should never be the sole reason to invest offshore. Things like where the investment will be held, what type of product or structure will be used, and how this will influence the client’s tax situation both during their lifetime and at death are far better elements to spend time getting right. Those are typically the elements that advisers and their clients should focus on – those that are within their control, rather than the currency or the market.  

Clients would be far better off articulating their needs and objectives to a qualified financial adviser and implementing the most suitable asset allocation to meet those needs. Where that need includes offshore exposure, the focus should be on the most feasible way to implement the plan given the client’s circumstances.

Reasons to invest offshore - In general, people should consider investing offshore as a means of diversification, as international markets offer a significantly larger opportunity set and exposure to asset classes, industries, companies, and geographies that are less accessible in the local equity market.

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