Multi Currency Portfolio Update Yawn or Gasp


Multi currency portfolios can leave us with questions as the latest review of the five multi currency portfolios we have tracked since November 1, 2006 (ten  months) leaves me wondering, “should we yawn or gasp?

 

Portfolios 2007  June 28 July 27 Aug 10 Aug 17 Aug 31 Sept 9
Swiss Samba 44.80% 44.47% 38.00% 15.19% 26.42% 30.86%
Emerging Market 54.31% 74.67% 61.27% 30.50% 58.18% 67.95%
Dollar Short 33.81% 37.90% 29.48% 9.14% 20.29% 23.16%
Dollar Neutral 37.64% 37.14% 29.13% 13.56% 22.33% 24.22%
Green    178.28%  197.01% 189.13% 110.93% 155.84% 170.22%

A week after August 10, the gasps began, but quickly slowed to a yawn. Now a month later, if we have blinked much,  nothing seems to have happened at all.

Do not be fooled though that this guarantees further strong growth.  The last month’s slump warns us that investors are ready to bolt at almost any negative news.

Thomas Fischer wrote: “This has been a quick rebound indeed – but perhaps it is short lived – the US job report from an hour ago hit the markets hard  and the bourses have come down 2% in an hour our green investments are down 3-4% this afternoon.  I still have this awful feeling and expect the second shoe to drop shortly. Recession combined with a full blown sub prime crisis would be a disaster. I also spoke with my traders and what they are telling me is not good news – even big banks come to Jyske to borrow money the money market is freezing up fast.  Personally I’m 50% in cash at the moment and beginning to believe it might be too little. We are definitely heading for some exciting/nerve wracking times which I guess that is an integral part of investing.”

 

What we have learned in the past two years of tracking portfolios is that those who hung on during the downfalls have done well.  Furthermore we have seen that great buying opportunities come during these corrections.

 

We have also learned that bond oriented portfolios recover more slowly than equities. This is as true here as it was last year.  The two dollar portfolios which are almost entirely in bonds are down about 50%. The Swiss Samba Portfolio which is a mixed portfolio of equities and bonds is down about 25%. The two share portfolios (Emerging and green) are down only 10% from last month.

 

I (as does Thomas) remain about 50% in cash or short term AAA bonds in strong currencies and look for downturn buying opportunities because downturns increase value.  I recently read that Warren Buffet is sitting on 50 billion dollars in liquidity as well looking for bad news to enhance value.

 

If a crash does not come, these five portfolios will end our twelve month study with phenomenal gains. Few portfolio managers will have seen their portfolios rise this well.  Even if the portfolios dropped 50% in the next two months they would be most respectable, even remarkable still.  So perhaps the most important lesson we have learned is that multi currency investing is powerful in ups and downs.

 

A delegate at the Jyske seminar approached me and said, “you do not know me, but ten years ago your reports led me to invest at Jyske Bank. I started with $100,000 and it is worth over a million dollars now.”   Such comments tickle me more than you can imagine. I love helping readers accumulate wealth! I hope your studies with us here have been of as much benefit to you.

 

Yet we should also see that each time there has been a correction these last two years, markets have quickly come back.  This suggests that investors want to stay in the game and that governments want economic growth enough that they will flood difficult times with liquidity.

 

This brings us to the same old answer. We can never tell exactly when its time to yawn or to gasp so we should do neither.  Just concentrate on finding good value regardless of market trends instead.

 

Gary

 

You still have time to meet with Merri, Thomas Fischer and me at our farm. The course is International Business & Investing Made EZ course in North Carolina , September 14-15-16, 2007. We hope to see you there. Details are at http://www.garyascott.com/nccourse/

 

All delegates are invited to the farm for afternoon tea on Sunday September 16. Here is our dining deck over the creek ready to serve!

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Or join us and Jyske Bank at our Hotel El Meson de las Flores for International Business & Investing Made EZ in Ecuador , November 9-10 and 11. http://www.garyascott.com/catalog/IBEZec/

See attached file.

 

P.S.  Low Subscription Update. Here is the latest word from the large publisher that we have developed a cooperative plan to offer our Multi Currency Educational Service.  “ Gary , I have sent your promo out to a designer this week…we’re eager to market ASAP.  I’m waiting to hear back from our ops crew about how best to get you the orders.”

 

This means that the time to extend your subscription at the low, existing $149 price is nearly through.  To take advantage and save during these last days simply go to http://www.garyascott.com/catalog/bldh


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