International Investments – Seven Year Itch Portfolio


* International Investments – Seven Year Portfolio Shift
* Natural Health Tip – Beware of the Seven Year Itch
* Ecuador Real Estate – Seven Properties for Sale

International investments take many forms. To help everyone see what can be done we periodically look at Merri’s and my investment portfolio. We do not suggest that this should be your portfolio. We only hope that sharing why and how we make changes can help you direct your financial planner and affairs.

We seem to be at an end of a seven year period in our portfolio. We have been making some big changes so let’s look at the portfolio, then the whys and how.

InvestmentDescriptionCurrencyInt. RateMaturity% of Portfolio
Current account US$4.500%  
Current account Brit Pds.4.000%  
Current account NOK2.000%  
Current account AUD5.125%  
Cert. Deposit US$5.110%  
3 Month Money Mkt. US$5.205%  
Cash Total    15%
 
SharesBank of FloridaUS$   
SharesJyske BankDKK   
SharesHYFLUX LIMITEDSingpore $   
Shares Total    7%
 
Mutual FundJyske Invest Latin America FundUSD   
Mutual FundJyske Invest Eastern Europe FundEUR   
Mutual FundJyske Invest German Equity FundEUR   
Mutual FundJyske Invest Japanese Stocks    
Mutual FundJyske Invest CHINA    
Mutual FundJyske Invest INDIA    
Mutual FundJyske Invest FAR EAST    
Mutual FundJyske Invest Favorite Stocks    
Mutual Fund Total     7%
 
BondLB Reinland-PhalzAUD5.875%24.07.2006 
BondGreat Belt BondsDKK4.000%20.12.2006 
BondBritish TelecomGBP7.125%07.12.2006 
BondLandwirt. RentenbankAUD4.500%28.12.2006 
BondNorway S467NOK6.750%15.01.2007 
BondRabobank NLUSD4.875%23.01.2007 
BondCouncil of EuropeUSD4.875%23.01.2007 
BondWestpac Trust NZNZD6.000%05.03.2007 
BondNederl. GemeentenUSD5.000%22.03.2007 
BondFord Credit CanadaGBP7.250%07.12.2007 
BondSwedish Export CreditNZD6.250%19.12.2007 
BondDresdner BankEUR4.000%19.01.2007 
BondLandwirt. RentenbankAUD5.500%16.04.2007 
BondHungary Governm.HUF6.250%12.06.2007 
BondScandinavian AirlinesEUR6.000%20.06.2008 
BondSpintab SWESEK5.000%18.06.2008 
BondDeutsche TelekomUSD3.875%22.07.2008 
BondNRW BankNZD6.500%26.08.2008 
BondVolkswagen Intl. FinanceNOK5.000%10.11.2008 
BondRabobank NLCAD4.250%05.01.2009 
BondEuropean Investment BKTRY10.000%28.01.2011 
BondHungary GovernHUF6.750%12.02.2013 
BondBrazil GVTBRL12.500%05.01.2016 
Bond Total    33%
 
LeverageInvest LoanCHF2.750%-208,634-12%
 
Gold     
Silver     
Metal Total    4%
 
Farm & Commercial Property   46%
 
Breakdown By Investment Type    
Current and CDS15.6%    
Stocks7.2%    
Mutual Funds6.7%    
Bonds33.32%    
Metals4.00%    
Real estate46.00%    
Loan-12.82%    
 
Breakdown By Currency    
US$56%    
Brit Pd.9%    
Emerging8%    
Euro9%    
Danish kroner7%    
NZ$4%    
Norway kroner3%    
Aust. $3%    
Japan yen2%    
Swede kroner1%    
Canada $1%    
Swiss franc-12.0%    

Seven years ago we shifted our portfolio as we sold most of our publishing business and shifted to an internet only affair. Interest rates and inflation were low then. Our interest was developing income then and seeing our bond values rise as interest rates dropped. At that time we were most heavily invested in bonds denominated in euro and affiliated currencies (British pounds, plus Danish, Swedish and Norwegian kroner). Second we were adding real estate we could enjoy and use in our business that would appreciate as well.

The portfolio above shows that as bonds have matured we have now added many more equities and emerging market currencies.

This is because we believe in global inflation and a weakening US dollar.

Here are some thoughts on our portfolio. First, we are increasing shares, but still only have three specific equities. Two of these equities are in businesses (banking) we know well, These are companies where we know the top management well as well. The third is based on our belief that water will become increasingly scarce, plus is a play in China. This company (Hyflux) does a big part of its business in China. We are adding other equities via mutual funds. We have chosen only ideas (Germany, Japan, India, China, Latin America and Eastern Europe) and let Jyske managers decide on the specific shares in each region. Our biggest weighting is in Japan with Emerging Asia second and the rest at equal weightings.

Second the portfolio is over diversified. This has to do with our PIEC three phase investing formulation. If you do not understand PIEC, see garyascott.com/archives/2000/02/02/55/index.html

Our business absorbs our main time, energy and interest. This portfolio’s goal is to keep our second and third tier capital stable until it is required and protect this capital against inflation. The diversification almost guarantees protection against doing really well. On the other hand it also keeps volatility low. This last month, which has been the second worst in a decade, the portfolio only dropped about 4% for the month. This is not as bad as it seems since the portfolio had risen almost 2% the month before. Even after this really terrible month the overall portfolio is still up over the last year.

Third, we continue to hold a large percentage in real estate. Well purchased and managed land will fight inflation and a falling greenback. Plus the land (farmland attached to our home) provides recreation and helps our business. This adds a huge holistic value to this asset! We enjoy this real estate, use it in our business and it has appreciated about 700% in the last seven years.

Learn more about fighting inflation by investing in emerging currencies, gold, silver, Ecuador, import-export, overseas markets and more. Join Merri, Thomas Fischer from Copenhagen and Steve from Ecuador and me at our next International Business and Investing Made EZ course in North Carolina. Review where to invest and do business now and learn which markets and currencies may be strong in the year ahead. Learn more about Ecuador import and export from Steve. Our May course was overbooked and the September up date is coming along. Our free accommodations are reserved on a first come first served basis so do not delay! Go to garyascott.com/catalog/ibeznc

Natural Health Tip – Beware of the Seven Year Itch

Holistic thinking is vital because investing goes beyond just the money. This is why we also focus on natural health. A holistic approach to life is important. A reader who agrees wrote:

“Hi Gary,

I just wanted to take a moment to tell you how much I enjoy your newsletters. I stumbled upon you when I was googling about foreign currency trading. I particularly like your travel stories and how you weave them into your view of the financial markets. Now, through your newsletter, I see that I share your holistic approach to life. Thank you for sharing your experiences and insights. Karse”

The seven year shift in our portfolio was interesting because one important aspect of health, that is hugely ignored, are the physiological changes that take place every seven years. Many religious texts refer to this. Our bodies in the first seven years of our life are geared to bonding us to our mothers. Age seven to 14 bonds to the peers of our own gender. At 14 the body shifts again and aims at bonding us with peers of the opposite gender. At 21 we shift to bond with a mate, etc.

We have many celebrations for the ages 14 and 21, but beyond this do little to recognize these shifts. We know about taking breaks, sabbaticals (seven comes from this word) and taking the seventh day. We even have a phrase for the problem (the seven year itch). Yet we do little else.

Here is the health tip. Recognize that your body, your thinking, your entire point of view will shift about every seven years. Prepare for this and be ready to embrace this change in your investing, business, social life, activity, thought process and every aspect of your life. Try to take sabbaticals.

Vaidya K.S. Mishra, a master healer in the eight avenues of ayurvedic healing, just completed a three day course last weekend here at that farm. This course contains immense healing knowledge to share. I was able to obtain 15 DVDs of this three day course and they are available for $129. First come first served. To buy send me a note at gary@garyascott.com

Ecuador Real Estate – Enjoy Your Property

Merri and I found Ecuador and changed our entire lives when I was age 49 (the beginning of the seventh, seven year cycle). Surprise. Surprise. We took a year and lived with Andean shamans in an entirely different way. This change has redirected our activity and lives. For example our hotel El Meson is not included in the portfolio above. This is in a foundation and the hotel operation is to finance helping the poor and all the profit there goes back to help the poor. This brings a different (and richer) type of profit!

On the subject of Ecuador and enjoying your investments, here is a Hacienda near us for sale that has its own hot springs!

The Hacienda San Francisco is a picturesque lodge where visitors have been coming for years to relax in the countryside, improve their health, and enjoy a unique vacation. It has has been in the Freile Larrea Family since 1640, and is just now for sale.

If you are interested in haciendas this one is rich with the history of the region. There is extraordinary beauty along the 30-minute ride on cobble stone roads. The hacienda is nestled high in the countryside and its thermal baths, are said to promote good health. There are many miles of trails nearby, a pool restaurant, outdoor tables, lounge chairs, tennis courts and a special area for barbecues. Asking price $200,000.

See Hacienda San Francico! Join Merri, me and Steve this July in Ecuador. Learn to learn better. Learn Spanish. See the hacienda, thermal spas, famous markets and much more. Go to garyascott.com/catalog/superspanish.html

One picture of the hacienda is below. You can see an entire picture gallery and more details at haciendapinsaqui.com/sanfrancisco/html/en/hacienda.htm