International Investments are Safe – If You Stay on Top of Your Portfolio


International investments require continual attention. Many readers write to me and ask if they can use stops losses on their international investments and multi – currency portfolios.

Every bank or broker that offers international investments will have his own rules but here is how Jyske Bank (where I have my multi-currency portfolio) works.

If I hold a share of any international equity investment I can place 30 day stop losses on any share.

Jyske does not place stop losses on international investments in mutual funds. Jyske Bank will, upon request, email you all the mutual fund prices daily. I use a simple method to monitor my international investments. I regularly update the mutual funds I hold in my portfolio, like this:

International Investments Fund
Dates
Fund
Jan 11
Feb. 17
Mar 12
Jyske Invest Japanese Equity Fund
110189
111471
111296
Jyske Invest China Equity Fund
247.60
254.50
256.40
Jyske Invest India Equity Fund
282.10
286.20
255.10
Jyske Invest Far East Equity Fund
404.90
422.40
403.00
Jyske Invest Favorite Equity Fund
85.75
85.90
85.30
Jyske Invest Turkey Equity Fund
90.25
93.80
99.70
Jyske Invest East Europe Equity Fund
528.90
532.70
540.20
Jyske Invest German Equity Fund
84.35
85.45
86.10
Jyske Invest Latin Equity Fund
360.70
356.40
385.30

If these international investments were to show a fast downwards trend I would up my observation to weekly or even daily.

I keep a 20% running stop loss calculated. Take the Japan Fund as an example. I would calculate the price and list it as below:

   
Jan 11
S/L
Feb. 17
S/L
Mar 12
S/L
JI Japanese Equity Fund
110,189
88,152
111,471
89,177
112,960
90,368

If the fund were to drop to the stop loss, I would take the profit and exit. If the fund is rising quickly, I may choose to lower the stop loss to 15% or even 10%.

One big benefit to the Jyske Invest funds is that they are low load (1/2%) and have no management fee, plus investors can swap from one Jyske Invest fund to another (there are 72 Jyske invest funds) without any switching charge.

Right now I have liquidated all my equity funds, but those who still hold equities may want to do this. When I liquidated I simply did a no fee swap from the Jyske Invest Equity funds shown above to Jyske Invest Bond Funds.

Jyske can set stops on currencies. Jyske’s system allows you to place the stop and it remains for any period of time until cancelled.

The bank cannot set a stop on a diversified multi-currency sandwich because there are here too many different holdings. The bank recommends that multi- currency portfolio investors set personal stop loss levels, so if the net value of an account drops to a level set by the client (10%-20%-30%) that the investor asks the bank to close the investment.

Take for example our green international investments portfolio.

CCY

Name
Price
Invested Amt

Today’s Val

EUR Seche Environnement
122.60
48,000.00
54,289.12
DKK Novozymes B
473.51
48,000.00
51,184.84
DKK Vestas Wind Systems
178.83
51,000.00
79,085.50
JPY Kurita Water Industr
2395.00
51,000.00
56,797.29
EUR Q-Cells Ag
32.90
51,000.00
73,674.12
SGD Hyflux Ltd
2.46
51,000.00
53,372.80
   
300,000.00
368,403.66
LOAN
JPY
1.880%
200,000.00
201,264.81
CURRENT VALUE
167,138.86

In this case one can track the share price and set stop losses (for one month at a time) or set a total value of the portfolio with your account manager so if at any time it drops to the set, the entire account would be liquidated (and loan repaid).

Take the portfolio above as an example. This portfolio started at $100,000 in November. It rose 86.22% by Feb 27, 2007.

If you decided to protect this profit with a 20% stop, then you would set your stop value at $149,618. So you would probably tell your account manager that if the portfolio dropped to $150,000 they should liquidate the account.

We formed the portfolio above with Jyske in November 2006. I have written a sixteen page email report about how 13 economic forces now clash to shape investments markets ahead that show the rewards and the risks. The report also outlines these and four Multi-Currency Portfolios we are tracking in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service. To learn more about International Investments

International investments can be fun too. See in tomorrow’s message how this Yatchak (with our group) reached the lake!

 

Until next message, may all your investments be good!

Gary

Join us for our updated May 25 – 27, 2007 International Investments Course in North Carolina. Thomas Fischer joins me to update global economics there. We will update our International investment portfolio there.


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