Gary Scott Portfolio Update


Here is the Gary Scott portfolio update.

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Gary Scott speaking at an International Investing seminar.

There are five ways to gain profits and security during times of inflation.   Current statistics do not show high inflation yet. (Obviously the statisticians do not buy their own groceries!)

I believe inflation will come and that multi currency equities, real estate, commodities, low cost countries and one’s own micro business are good places to invest in now.

I practice what I preach (actually I preach what I practice) as my portfolio shifts below show.

To help readers understand how Merri and I are investing, every six months or so I review changes in our personal portfolio at this site.

Our portfolio diversification now looks like this.

Portfolio review

I am at almost a maximum invested position at this time… though an Ecuador property sale means that my Ecuador real estate position will be declining and my cash position will rise quickly.  I am looking where to place the funds.

We still have a large position in bonds.   We could take profits on bonds but the high yields we have, especially on the emerging bonds… especially with their short maturities means we’ll hold most to maturity.  How can we beat 12% per annum in Brazilian real?

Not only has the income been great but as the chart below shows… the real has appreciated nicely versus the US dollar.

US dollar to Brazilian real

brazilian real chart

I am aiming liquidity at commodities and equities because my diversification in these areas is low.   I have overweighted my portfolio in real estate rather than equities and am continuing to invest in real estate…  improving existing property rather than buying more.   I am also investing more in my own micro business which continues to grow nicely.

Portfolio review

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Gary Scott recording on financial TV at…

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Jyske Bank studios and…

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Jyske trading hall.

At our February 11-13, 2011 International Investing & Business seminars we’ll review my current 2011 asset allocation, why and which investments I am investigating for possible addition now including…

#1: More silver mining shares.

#2: German domestic companies and others that will profit if the euro is split into “euro marks” and “euro pigs”.

#3: Urcuqui lots at $1,000 to $2,000 plus other path of progress good value Ecuador real estate.

#4:  Florida real estate potential.

#5:  High income equities such as Singapore’s Suntec REIT.

#6:  Power shares and energy investments.

#7:  Shares that grow with a US dollar crash.

See how to join Merri, me, Thomas Fisher of Jyske Bank, Rich Checkan of Asset Strategies (gold silver & forex) and Bob Shane (quantum physics and FM learning) on Feb. 11, 12, 13 Friday Saturday and Sunday in Mt. Dora.

We have two places left for this February 11-13 Mt. Dora International Investing and Business seminar.

Here is a three year view of how my asset allocation has changed.

In 2009, my portfolio breakdown was:

Portfolio review

November 2009 I leveraged the portfolio just a little with a  US dollar loan that equaled about 2% of the portfolio.

This leverage altered the currency allocation in my liquid portfolio to:

US$  -2.0%
CAD  6.0%
NZD  6.0%
AUD   6.0%
$ Bloc   16.0%

GBP   8.0%
DKK  10.0%
SEK   4.0%

EURO 39.0%
Euro bloc 61.0%

TRY 6.0%
HUF 7.0%
BRL 6.0%
EMCS 6.0%
Emg Curr  25.0%

This placed  the portfolio into a negative US dollar position and represented a large overweighting in the euro and related currencies.

In 2010 I sold three investments and added dollar related currencies to reduce that euro overweighting.  Plus I swapped Hungarian florin for Polish zloty in my eastern European Bloc.

I liquidated the Jyske Invest Danish Bond Fund and Jyske Invest Euro Bond Fund. These were purchased in 2007 for excessive caution even though their yields were very low.

With the proceeds of this liquidation I invested equally in the following bonds.

Curr                Coupon                                       Price       Yield
NOK  4% Rabo Bank 29.05.2013 (AAA)     101.25   3.60% p.a.
CAD 4,95% KFW October 2014  (AAA)      109.60  2.80% p.a.
AUD 6,00% EIB 14.08.2013 (AAA)            101.60   5.50% p.a.
NZD 6,50% EIB 10.09.2014 (AAA)            104.50   5.39% p.a
MXN 8% Bonos 19.12.2013 (A+)               103.60   6.97% p.a.
BRL 11,25% EIB 14.02.2013 (AAA)            104.75   9.41% p.a.

These were still pretty conservative investments but offered a higher return than the euro and Danish kroner bonds.

Plus this shift showed growing concern over potential weakness in the euro.

I also sold the Hungary bonds in my portfolio and purchased the Polish bond below with the proceeds.

PLN 6.50% EIB 12.08.2014   (AAA)            107.00   4.77% p.a.

This left my asset allocation in early 2010 looking like this.

Portfolio review

Late in 2010 I took profits on the sale of part of Jyske Invest Turkey Fund and Jyske European Equity Fund.  I mopped up dividends received and sold the Polish bond and invested in the Polish silver and mining company KGHM Polska Meidz. I sold part of the Australian dollar bonds holdings and added Brookfield Power and the Suntec Singapore REIT as high income producing equities.

Later I used extra cash to pay off the US dollar leverage loan. I had borrowed dollars invested in Canadian, New Zealand dollars and Mexican pesos.  The fundamental problems in both Europe and the US suggest that we’ll see a lot of currency volatility in 2011.   I decided to eliminate the leverage as a precaution.  Profits are magnified by leverage but so are losses.  My major focus is on my micro business and I don’t want to be distracted during seminars and writing periods by having to watch fast moving markets. 

I added the Ishares Latin American fund and Singapore Suntec REIT.

This brought me to our current position shown above. This is highly diversified in multi currency bonds, equities, our micro business, real estate, commodities and Ecuador (a low cost country).

I hope to share more ideas on how to diversify for the change ahead at our investing and business seminar this upcoming weekend.  We have two places left.

Gary


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