Multi Currency Portfolio Update Lessons


Multi currency portfolio Lessons are reviewed here.

Here is the latest review of the five multi currency portfolio’s we have tracked since November 1, 2006 (eight months-20 days).

Portfolios 2007 Apr 30 June 1 June 28 July 10 July 20
Swiss Samba 26.60% 41.46% 44.80% 45.22% 45.84%
Emerging Market 32.46% 40.38% 54.31% 62.77% 67.67%
Dollar Short 30.79% 31.84% 33.81% 38.85% 40.31%
Dollar Neutral 25.58% 32.26% 37.64% 38.59% 38.07%
Green 135.11% 170.33% 178.28% 201.14% 214.15%

The portfolio performances reflect several lessons.

#1: The US dollar is falling again. We can see how the dollar short portfolio suddenly jumped ahead of the dollar neutral. We can see the greenback’s peak in March and April. The dollar short and dollar neutral; portfolios are very similar. The main difference is that the dollar neutral portfolio has two US dollar bonds that represent 12% of the portfolio. Plus the US dollar short portfolio is leveraged with a US dollar loan. The dollar neutral is leveraged two times with the mixed loan below:

Percent of Loan Interest Rate $Amount $ Amount to
    Borrowed Repay now
20.00% JPY 1.880% 40,000.00 38,315.78
50.00% CHF 3.130% 100,000.00 103,555.93
15.00% EUR 4.500% 30,000.00 32,424.54
15.00% CZK 3.880% 30,000.00 32,103.36

$200,000 was borrowed and it would require $206,399.61 to repay the loan right now. That shows a forex loss of $6,399 which means that buck is lower now (by about 3%) than when it was borrowed.

There is another currency lesson here. The yen is even weaker than the greenback. We can see this in the loan above. Three of the four loans, (Swiss franc, Euro and Czech koruna) would all require more money to pay off. The yen loan however would cost less, in dollars, to pay off, than what was loaned. We can see this even more dramatically in the Green Portfolio. $200,000 in yen was borrowed and only $191,578.91 would be required to pay off the loan. This shows that the yen has fallen about 4.6% versus the dollar despite the greenback’s weakness.

One must wonder when this yen weakness will end? Be careful with yen loans!

Until next update, good global investing!

Gary

See attached file.

We will analysis these five portfolios, plus introduce the 2008 portfolios at our next two International Investing and Business Made EZ courses.

Join us September 14 – 16, 2007 in North Carolina , http://www.garyascott.com/nccourse

Or come to Ecuador November 9-11. See http://www.garyascott.com/catalog/IBEZec/

If you come to Ecuador , why not stay on for our Andean and Shamanic courses as well.

Nov. 12 – 14, Mon. – Weds. Andes Extension & Real Estate Tour.

http://www.garyascott.com/catalog/andeanext/

Nov. 16 – 18, Fri. – Sun. Andean Shamanic Tour.

http://www.garyascott.com/catalog/mingo/

Attend all three November tours and save $398. See http://www.garyascott.com/catalog/save5/


Related Artices

If you enjoyed this article "Multi Currency Portfolio Update Lessons" you may find these related articles of interest too:

    None Found