International Investments in Czech Equities with Czech Koruna Loans


Natural Health Tip

Ecuador Real Estate

International investments that are leveraged can be millionaire makers as this message shows.

This is the fourth and last message in a series about a new international investments Borrow Low – Deposit High opportunity borrowing the Czech koruna.

You can read messages #1, #2 and #3 in the series at
International Investments – Out of the Czech Kroner (Koruna)
International Investments in Czech Bonds of Short Maturity
International Investments in Czech Bonds of Medium Maturity

You can read today’s natural health tip on how to gain natural health through an autumnal cleanup below.

You can read about Ecuador real estate and why Ecuador is not a taxing place to be below as well.

First here is one profitable type of MultiCurrency Sandwich portfolio of international investments is one with minimal currency risk. In this instance you can borrow Czech koruna for 3.75% and invest in Czech equities. See why these international investments may be good right here:

The other messages in this series looked at borrowing koruna and investing in euro denominated bonds. Yield potential was between 9.62% and 16.70%. These are attractive returns for bond investment but many of our recent messages have shown that this is perhaps a better time to invest in shares rather than bonds. This could be especially true of Czech shares as they have risen strongly over the last decade.

In the past five years, for example the main PX Index of the Prague Stock Exchange has risen from 372 (in 2001) to 1451. That’s an increase of 2.9 times.

You can learn more about the Prague Stock Exchange at http://www.pse.cz/default.asp?language=english
Prague Stock Exchange statistics are at http://www.pse.cz/dokument.aspx?k=Statistic-Files

Assume (as in yesterday’s message), you invest $100,000 and borrow $200,000 more in Czech koruna at 3.75% and bought Czech shares that performed as well over the next five years.

The $300,000 would grow to $870,000. Your loan costs would be $37,500. Your profit after interest would be $732,500 on $100,000 of cash invested.

That is a pretty nice profit!

There are numerous risks. First, the shares you invest in could drop in value instead of rise. There is no guarantee that the Czech economy or Czech shares will rise as quickly in the next five years. Leverage accelerates any loss. Interest rates could also rise. Finally the koruna could fall in value reducing the profit or creating a loss on the $100,000 invested.

If you take this approach be sure to choose the right shares. Currently the Jyske Invest Eastern European Equity Fund has three Czech shares in its portfolio. They are:
Ceske Energeticke Zavody CZK 4.36%
Telefonica 02 Czech Republic A CZK 1.86%
Unipetrol CZK 0.60%

You can get further information on how to have a Czech koruna loan and Czech shares from Thomas Fischer at fischer@jyskebank.dk

Another alternative is to borrow koruna and invest the loan in the Jyske Invest Eastern European Equity Fund which is invested in three Czech shares. You add some forex risk (and profit potential) because this fund is invested in other Eastern European currencies such as the Russian Ruble, Hungarian Florin and such.

In exchange you gain safety from diversifying into more than one equity market though you remain focused in the one region. This Jyske Fund has also performed really well in the last five years, up from 110 euro to 500 euro since 2001. That’s an increase of 3.54 times.

Assume you invest $100,000 and borrow $200,000 more in Czech koruna at 3.75% and invest in this fund that performs as well over the next five years.

The $300,000 would grow to $1,062,000. Your loan costs would be $37,500. Your profit after interest would be $1,024,500 on $100,000 of cash invested. Past performance is no guarantee of future profits. In fact such high performance should not be expected. The four major Eastern European markets, (Czech Republic , Poland , Russia and Hungary) are now all neutrally rated by Keppler Asset Management (as you will see in tomorrow’s message).

Be sure you review the risks with your banker or financial consultant before making this type of investment.

Learn how to double your profit potential with Czech MultiCurrency Sandwich and more. Get a FREE nine chapter report that shows how to calculate all the risk, rewards in Borrow Low Deposit High. See Annual Multicurrency Service

Join Merri and me this November 9-12, 2006 in Ecuador. Meet economic experts from Jyske Bank. Learn more about Borrow Low-Deposit High. Meet Steve, our man in Ecuador , and learn about products to export. Meet our Ecuadorian attorney, Dr. Andres Cordova, and learn how to own real estate in Galapagos and the cloud forests. Meet our tour operator, Santiago Guamani, and learn how to create your own tour business. See International Business Made EZ, Ecuador

Natural Health Tip – Enhance Natural Health with Peak Experiences. See Peak Experiences

Ecuador Real Estate – Ecuador is Not a Taxing Place to Be

International business can bring some excellent tax advantages. Learn more about the tax, asset protection and profitability advantages in self publishing at Writing and Publishing Courses for Self Publishing

One important consideration when looking to live or have an international business in another country is how you will be taxed.

Recently a reader asked if retirement income is exempt in Ecuador? He wanted to know if Ecuador is like many retirement or re-entrenchment offshore lower-cost living locales … where they want to tax ALL incomes?

The reply below from our friend and attorney Dr. Andres Cordova is encouraging.

“Dear Gary: With regards to foreigners and taxation in Ecuador, we must distinguish if their income has an Ecuadorian source or not. Income from Ecuadorian sources, with few exceptions, is subject to income tax in Ecuador. For example, if the foreigner is paid by an Ecuadorian company, or if he receives rents from real estate in Ecuador, etc. Foreign residents in Ecuador who receive income from pension funds, stocks, or any other non Ecuadorian source need not pay taxes in Ecuador regarding such foreign income. I should note that the profits had in the eventual sale of real estate in Ecuador pay no taxes either. Kind regards, Andrés

May all your investments and adventures wherever they are be not taxing as well!

Sunrise can bring happiness. This shot of sunrise over Vancouver comes from readers Dennis and Nicki Horton, who spend time enjoying Ecuador sunrises as well. Send me your photos of what makes you happy!

Gary

P.S. Enjoy the following services and courses in Ecuador in the autumn and winter of 2006-2007.

October 12-16, 2006 – Learn how to learn, retain and process information better + Spanish. Super Thinking + Super Memory + Spanish

November 9-12, 2006 – International Business and Investing Made EZ – Ecuador

November 13-15, 2006 – High Andes Tour. Discover the Mystical Andes

January 5-7, 2007 – Inspired Investing beyond Logic. Vedic Astrology in Ecuador

January 8-10, 2007 – Ayurvedic Cleanse.

Jan 12-14, 2007 – Wedding Photography Course by Todd Smith

Todd Smith Photo – India 2006

February 2-8, 2007 – Learn how to Earn anywhere through Import – Export. Gary & Merri Scott’s Import/Export Expedition in Ecuador

Any time that space is available. Rejuvenate your health with a week’s R & R at El Meson. See R&R at El Meson

Any time that space is available. Stay a month in El Meson and enjoy the full winter sun. El Meson de las Flores Hometel

 


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