Tag Archive | "Foreign exchange market"

Diversification, Speculation and Hedge


Multi currency investments offer opportunities in diversification, speculation and hedging.

The Wall Street Journal article “A Strengthening British Pound” (1) shows how there are three  ways to gain from multi currency investments with diversification, speculation and or a hedge.

pound dollar chart yahoo

British pound versus dollar chart at www.finance.yahoo.com (2) shows the pound up over 10% in the last year. (click on image to enlarge).

The article says: A growing conviction among investors that the Bank of England will be the first major central bank to raise interest rates continued to drive the pound higher, propelling it above $1.70 for the first time in almost five years.

The surprising strength of the U.K.’s economic recovery has been a boon for sterling over the past year and has prompted a response from the central bank chief. The currency dipped below $1.50 last July, its lowest level in the past 12 months.

Early in London’s trading day, the pound hit $1.7012, the highest intraday level since Aug. 6, 2009, according to CQG. It eased later in the day to $1.6978 late in London.

Against the euro, sterling’s rise in recent days has been even sharper. The currency touched a fresh 19-month low of 0.7961 to the pound during London trading on Monday.

This strength shows three ways we can use multi-currency investment strategies.

First, we can diversify.  This is the strategy I use.  My portfolio contains euro, British pounds, Polish zloty, Danish kroner, Mexican peso, Brazilian real and US, Singapore, Australian, Canadian and New Zealand dollars.  This evens out the currency strength of my portfolio.  From time to time I try to increase the weighting of currencies I believe will rise.  Fortunately last year I invested in some pound fixed income income investments paying 4% in pounds.  This means the yield I receive when converted into US dollars has increased to 4.53%. Plus if I redeemed this investment now, My $100,000 invested would be worth $110,000.

One of many simple ways to diversify currencies is with the ENR Global Currency Sandwich offered by ENR Asset Managers in Montreal.

ENR says: Investment Objective: To provide a fundamentally strong and diversified portfolio of foreign currencies to hedge against the long-term decline of the U.S. dollar. Our investment criteria for selecting currencies include those units harboring a combination of the following: trade surpluses, budget surpluses, low net relative debt compared to other regional partners, a high savings rate and in some circumstances, tax reform, which is bullish for FDIs or foreign direct investment. Some currencies, however, might not nurture all of the above characteristics but should at least maintain several to qualify in our currency basket. Investors can choose whether to include or exclude gold bullion as part of the basket.

2014 ENR Global Currency Sandwich:

British pound (GBP)
Norwegian krone (NOK)
Swedish krona (SEK)
New Zealand dollar (NZD)
Singapore dollar (SGD)
Mexican peso (MXN)
Gold (optional)

Get more details at ENR’s website

or from Thomas Fischer at Thomas@enrasset.com

See part II  “Diversification, Speculation and Hedge II” which reviews how to speculate with multi currency loans and Singapore real estate.

Gary

Multi Currency Value Investing Seminar

Old Accord Creates New Profits – Multi Currency Investments.

Earn more with multi currency stock market breakouts.

Improve Safety – Increase Profits

Learn how to improve the safety of your savings and investments by selecting good value and diversified investments in a multi-currency portfolio.

Few decisions are as important to your wealth as the value of the markets and currencies you invest in.  This has been our area of expertise since the 1970s and we have worked with and advised some of the largest currency traders in the world.

Gain Protection First – Against the Dollar’s Purchasing Power Loss.  In 1913 the The Federal Reserve Act created the Federal Reserve Bank to protect the purchasing power of the US dollar, which has since lost about 94% of its purchasing power.  Here is its price compared with gold since 1900.

priced in gold

Dollar chart from pricedingold.com (1)

The Fed has let the dollar lose most of its strength plus has allowed interest rates to fall so low, that safe investments cannot keep pace with the drop in purchasing power.

multi-currency-chart

Chart from Grandfather Economic Report (2)

Many investors have forgotten about the risk of a falling dollar because the greenback has been strong for the past five years.  This temporary dollar strength came after the great recession of 2009 just as there was temporary dollar strength after the great recession of the 1980s.  Then about six years after the recession, an agreement was made by major governments to weaken the dollar.

There was a severe global economic recession affecting much of the developed world in the late 1970s and early 1980s.  The United States and Japan exited the recession relatively early, but high unemployment would continue to affect Europe and the UK through to at least 1985.  As a consequence between 1980 and 1985, the US dollar had appreciated by about 50% against the Japanese yen, Deutsche mark, French franc and British pound, the currencies of the next four biggest economies at the time. Then the governments reached an agreement and exchange rate values of the dollar versus the yen declined by 51% from 1985 to 1987.

Now the world is again in the same place.  The recession is over.  Europe is a bit behind in recovery and the dollar is higher than before the recession.

There is no reason for the greenback to be  strong.

The agreement in 1985 was called the Plaza Accord.   Over just two years the greenback dropped nearly 50% versus other major currencies.  The next accord will generate great profits for those who know what to do while it ruins the purchasing power of dollar back investments.

The strong US dollar and low interest rates have created one of the biggest stock and multi currency breakout opportunities in history.  Learn how to create a plan to profit from multi currency shifts ahead.

One reason for the potential gains is that stock markets and currency values are cyclical.  Due to low interest rates created by the 2009 economic downturn, the US and a few other equity markets have risen to some of their highest prices, ever.  These markets offer very poor value now.  The steep valuation creates incredible profit potential but also hides some enormous risks.  Learn how to develop an investing strategy based of earnings, cash flows, dividends and book values to increase potential for profit and reduce the risks.

Next Extra Profit Created by Value Breakouts

Over the history of US equity markets, the  price of overall markets have risen about 9.1 percent, respectively, compounded annually.  Yet over more than a hundred years of stock market activity,  a majority of the profits have come from just a very few dramatic breakouts.

Equity markets are ruled in the short term by emotions that create unpredictable ups and downs.  Numerous fears of defaults, worries of double dip recessions, high unemployment, concerns about fiscal cliffs, hold investors back.  Yet global population growth and advances in production and prosperity are relentless economic fundamentals that increase value.

When fear holds back a a fundamentally rising value, rising profit potential grows.  Values increase as prices stagnate.  Then markets break free and rocket upwards creating wealth, prosperity and growth.

Find out which breakouts are likely to take place next.

Stocks rise from the cycle of war, productivity and demographics. Cycles create recurring profits. Economies and stock markets cycle up and down around every 15 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns create war.

Here is the war stock cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WWIII) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Learn how the Cyber War (WWIV) may change the way we live and act and how this will affect currencies and investments.

Learn:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios), but his big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of outperformance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  Buffett leverages his portfolio at a ratio of approximately 1.6 to 1.  This rate of expansion by the way is called the “Golden Ratio”.  It is a mathematical formula that controls the growth of most natural things; trees, the shape of leaves, the spiral of shells, as well as the way economies and societies grow.

We’ll sum the strategy, how to leverage cheap, safe, quality stocks and for what period of time based on your circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn how to span the behavior gap.  Behavior gaps are among the biggest reasons why so many investors fail.  Human evolution makes fear the second most powerful motivator.  (Greed is the third.)  Fear creates investment losses due to behavior gaps.  Fear motivates us more strongly than desire.  By nature investors are risk adverse, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

Combine your needs and capabilities with the secrets and the math of our good value model portfolio.

Share ideas about my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.

Markets included in this portfolio are:

• Norway
• Australia
• Hong Kong
• Japan
• Singapore
• United Kingdom
• Taiwan
• South Korea
• China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

Learn how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.  You are investing in a diversified portfolio of good value indices.  A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Learn the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

The results of this test  show how you can gain on any purchase of country ETFs.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip 2017” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Your subscription will be charged $299 a year from now, but you can cancel at any time.

Gary

 

Gary

(1) Dollar chart from pricedingold.com

(2) Grandfather Economic Report

 

50 Year Investment Seminar

Old Accord Creates New Profits – Multi Currency Investments.

Earn more with multi currency stock market breakouts.

Improve Safety – Increase Profits

Learn how to improve the safety of your savings and investments by selecting good value and diversified investments in a multi-currency portfolio.

Few decisions are as important to your wealth as the value of the markets and currencies you invest in.  This has been our area of expertise since the 1970s and we have worked with and advised some of the largest currency traders in the world.

Gain Protection First – Against the Dollar’s Purchasing Power Loss.  In 1913 the The Federal Reserve Act created the Federal Reserve Bank to protect the purchasing power of the US dollar, which has since lost about 94% of its purchasing power.  Here is its price compared with gold since 1900.

priced in gold

Dollar chart from pricedingold.com (1)

The Fed has let the dollar lose most of its strength plus has allowed interest rates to fall so low, that safe investments cannot keep pace with the drop in purchasing power.

multi-currency-chart

Chart from Grandfather Economic Report (2)

Many investors have forgotten about the risk of a falling dollar because the greenback has been strong for the past five years.  This temporary dollar strength came after the great recession of 2009 just as there was temporary dollar strength after the great recession of the 1980s.  Then about six years after the recession, an agreement was made by major governments to weaken the dollar.

There was a severe global economic recession affecting much of the developed world in the late 1970s and early 1980s.  The United States and Japan exited the recession relatively early, but high unemployment would continue to affect Europe and the UK through to at least 1985.  As a consequence between 1980 and 1985, the US dollar had appreciated by about 50% against the Japanese yen, Deutsche mark, French franc and British pound, the currencies of the next four biggest economies at the time. Then the governments reached an agreement and exchange rate values of the dollar versus the yen declined by 51% from 1985 to 1987.

Now the world is again in the same place.  The recession is over.  Europe is a bit behind in recovery and the dollar is higher than before the recession.

There is no reason for the greenback to be  strong.

The agreement in 1985 was called the Plaza Accord.   Over just two years the greenback dropped nearly 50% versus other major currencies.  The next accord will generate great profits for those who know what to do while it ruins the purchasing power of dollar back investments.

The strong US dollar and low interest rates have created one of the biggest stock and multi currency breakout opportunities in history.  Learn how to create a plan to profit from multi currency shifts ahead.

One reason for the potential gains is that stock markets and currency values are cyclical.  Due to low interest rates created by the 2009 economic downturn, the US and a few other equity markets have risen to some of their highest prices, ever.  These markets offer very poor value now.  The steep valuation creates incredible profit potential but also hides some enormous risks.  Learn how to develop an investing strategy based of earnings, cash flows, dividends and book values to increase potential for profit and reduce the risks.

Next Extra Profit Created by Value Breakouts

Over the history of US equity markets, the  price of overall markets have risen about 9.1 percent, respectively, compounded annually.  Yet over more than a hundred years of stock market activity,  a majority of the profits have come from just a very few dramatic breakouts.

Equity markets are ruled in the short term by emotions that create unpredictable ups and downs.  Numerous fears of defaults, worries of double dip recessions, high unemployment, concerns about fiscal cliffs, hold investors back.  Yet global population growth and advances in production and prosperity are relentless economic fundamentals that increase value.

When fear holds back a a fundamentally rising value, rising profit potential grows.  Values increase as prices stagnate.  Then markets break free and rocket upwards creating wealth, prosperity and growth.

Find out which breakouts are likely to take place next.

Stocks rise from the cycle of war, productivity and demographics. Cycles create recurring profits. Economies and stock markets cycle up and down around every 15 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns create war.

Here is the war stock cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WWIII) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Learn how the Cyber War (WWIV) may change the way we live and act and how this will affect currencies and investments.

Learn:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios), but his big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of outperformance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  Buffett leverages his portfolio at a ratio of approximately 1.6 to 1.  This rate of expansion by the way is called the “Golden Ratio”.  It is a mathematical formula that controls the growth of most natural things; trees, the shape of leaves, the spiral of shells, as well as the way economies and societies grow.

We’ll sum the strategy, how to leverage cheap, safe, quality stocks and for what period of time based on your circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn how to span the behavior gap.  Behavior gaps are among the biggest reasons why so many investors fail.  Human evolution makes fear the second most powerful motivator.  (Greed is the third.)  Fear creates investment losses due to behavior gaps.  Fear motivates us more strongly than desire.  By nature investors are risk adverse, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

Combine your needs and capabilities with the secrets and the math of our good value model portfolio.

Share ideas about my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.

Markets included in this portfolio are:

• Norway
• Australia
• Hong Kong
• Japan
• Singapore
• United Kingdom
• Taiwan
• South Korea
• China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

Learn how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.  You are investing in a diversified portfolio of good value indices.  A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Learn the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

The results of this test  show how you can gain on any purchase of country ETFs.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip 2017” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Your subscription will be charged $299 a year from now, but you can cancel at any time.

Gary

 

Gary

(1) Dollar chart from pricedingold.com

(2) Grandfather Economic Report

 

 

(1) Wall Street Journal on a strengthening pound

(2) Pound versus US$ chart www.finance.yahoo.com

More Problems Emerge in Multi Currency Market


More Problems Emerge in Multi Currency Market.

Our multi currency message entitled Important Multi Currency Shift of two weeks ago said: We can see a huge multi currency market shift  in this Emerging Market Value Update.   There was a huge value shift of global stock markets in 2010.

Prior to the 2010 shift we weighted our recommendations toward investments in emerging markets.  They enjoyed faster growth than developed markets.  Then in 2010 we warned that values had flipped.  Developed markets offered better value than emerging markets.

Now the values have flipped again.  This update suggests that this is a good time to take profits on over weighting of developed market shares and to re calibrate one’s portfolio to an over weighting of emerging market shares.

See what that emerging market news means for this share Riocan REIT.

REIT

Up 112% since

REIT

The year’s drop in this share price creates value and a high yield.

Both images from www.ca.finance.yahoo.com

We can see the continued revaluation of emerging markets in the weekly market update at Jyske Global Asset Management which says:

Turmoil in Emerging Markets

Paradoxically, the prospect for an improving US economy, and the thereof scaling back of the extraordinary monetary measures is exhibiting the weaknesses in the Emerging countries – causing investors to flee.  

Since May, international investors have reduced their exposure to emerging markets in expectation of an imminent scaling down of QE (Quarterly Earnings).  The selloff culminated this week where especially India and Turkey got severely hit with plunging currencies and surging bond yields, bringing back memories to the Asian financial crisis in 1997/98.

In India, the rupee plunged to a record low and benchmark Indian bond yields surged to a 12-year high in a panic-response to last week’s limited domestic capital control.

India’s large current account deficit and inability to introduce substantial economic reforms have made the rupee especially vulnerable to capital outflow. Since May, the Rupee have depreciated almost 20% versus the US dollar.

Eric Roseman at ENR Asset Management, who will take over the management of the funds held by American investors at Jyske as of September, also noted the potential emerging problems in his August Outlook.

A growing conflict in Egypt risks tipping the Middle East into a wider conflict, possibly threatening Iran, Iraq, Turkey and Israel. The United States, thus far, has failed to contain the Egyptian crisis. U.S. foreign policy failure holds the cards for possibly re-balancing the actors in the Middle Eastern theater, if Egypt slides deeper into political turmoil and distances itself from the United States.

From a regional perspective, the major markets continue to offer lower relative volatility than the emerging markets and we continue to overweight advanced economies in 2013; India’s deepening economic crisis is another dose of bad news for emerging markets.

This suggests that long term opportunity is building in emerging markets.

For shorter term, especially for investors who require income, high yield shares in major markets still make sense.

Eric also wrote:  Our asset allocation still favors high quality equities that mostly pay dividends.

We still recommend Colony Financial (CLNY) sporting a yield greater than 7% and trading at a 13% discount to book-value.

Riocan REIT (REI. UN), Canada’s largest commercial REIT, has fallen sharply but trades at incredible values at this price. Riocan sells at a 52-week low, trades at 7.9 times trailing earnings and yields 5.86%

For more details, American investors should contact Thomas Fischer at fischer@jgam.com

Other Investors contact Henrik Boellingtoft at Jyske Private Bank at Henrik.boellingtoft@jbpb.dk

 Which to choose?

So where should one invest, in emerging markets or good value high yielding shares like Riocan?

My reply to the reader’s question below should help answer this question.

Gary,  Your recommended stock, Hyflux, has done poorly since your call. Unfortunately, I own it.  Do you still like it??  I know emerging market stocks are down; perhaps this is in sympathy.

My reply:  Yes, we have this in our portfolio as part of our long term growth strategy.

There are three negative elements at this stage.  One is the overall emerging market downgrade.  Singapore can hardly be called an emerging market but its main business is in emerging markets.

The next negative is the strong US dollar.  Over the last year the greenback has risen versus the currency in which the Hyflux shares are denominated.  

singapore dollar

US dollar rising against Singapore www.finance.yahoo.com chart

This to me creates extra value because the fundamentals for the Singapore dollar are strong and for the US dollar weak.

US GDP Growth last year 1.4%

Singapore GDP Growth last year 3.8%

US current account balance for last year  -$425 billion or -2.7% of GDP

Singapore current account balance for last year  +$49 billion or +19% of GDP

US Budget Balance as % of GDP for last year -4.5%

Singapore Budget Balance as % of GDP for last year +0.7%

US Unemployment  7.4%

Singapore Unemployment  2.1%

US$ Interest Rate 10 year bonds  2.71%

Singapore $ Interest Rate 10 year bonds 2.45%

This is a classic indicator that it is a good time to borrow US dollars and invest in Singapore dollars.

Third, Hyflux has substantial investments in the Middle East and I believe this has been detrimental. However they are good managers and also are in China and both China and the Middle East need water… so we continue to hold for the long term.

However note in our personal portfolio breakdown that this only represents 2% of our holdings.  We see this as a long term capital opportunity, but you should work with a financial adviser to see what portion of your portfolio should be geared to income and what part capital appreciation. You could also plan what portion of your investments should be dedicated to short, medium and long term growth based on your financial position and needs.

Multi currency subscriber can see our 2103 portfolio breakdown at our password protected site.

Gary

Get a password and our multi currency portfolio report (normally $79)  free when you enroll in our October or February Investing and Business course.

Learn about the Singapore dollar breakout and when breakouts earn the greatest profits.

Multi Currency Value Investing Seminar

Old Accord Creates New Profits – Multi Currency Investments.

Earn more with multi currency stock market breakouts.

Improve Safety – Increase Profits

Learn how to improve the safety of your savings and investments by selecting good value and diversified investments in a multi-currency portfolio.

Few decisions are as important to your wealth as the value of the markets and currencies you invest in.  This has been our area of expertise since the 1970s and we have worked with and advised some of the largest currency traders in the world.

Gain Protection First – Against the Dollar’s Purchasing Power Loss.  In 1913 the The Federal Reserve Act created the Federal Reserve Bank to protect the purchasing power of the US dollar, which has since lost about 94% of its purchasing power.  Here is its price compared with gold since 1900.

priced in gold

Dollar chart from pricedingold.com (1)

The Fed has let the dollar lose most of its strength plus has allowed interest rates to fall so low, that safe investments cannot keep pace with the drop in purchasing power.

multi-currency-chart

Chart from Grandfather Economic Report (2)

Many investors have forgotten about the risk of a falling dollar because the greenback has been strong for the past five years.  This temporary dollar strength came after the great recession of 2009 just as there was temporary dollar strength after the great recession of the 1980s.  Then about six years after the recession, an agreement was made by major governments to weaken the dollar.

There was a severe global economic recession affecting much of the developed world in the late 1970s and early 1980s.  The United States and Japan exited the recession relatively early, but high unemployment would continue to affect Europe and the UK through to at least 1985.  As a consequence between 1980 and 1985, the US dollar had appreciated by about 50% against the Japanese yen, Deutsche mark, French franc and British pound, the currencies of the next four biggest economies at the time. Then the governments reached an agreement and exchange rate values of the dollar versus the yen declined by 51% from 1985 to 1987.

Now the world is again in the same place.  The recession is over.  Europe is a bit behind in recovery and the dollar is higher than before the recession.

There is no reason for the greenback to be  strong.

The agreement in 1985 was called the Plaza Accord.   Over just two years the greenback dropped nearly 50% versus other major currencies.  The next accord will generate great profits for those who know what to do while it ruins the purchasing power of dollar back investments.

The strong US dollar and low interest rates have created one of the biggest stock and multi currency breakout opportunities in history.  Learn how to create a plan to profit from multi currency shifts ahead.

One reason for the potential gains is that stock markets and currency values are cyclical.  Due to low interest rates created by the 2009 economic downturn, the US and a few other equity markets have risen to some of their highest prices, ever.  These markets offer very poor value now.  The steep valuation creates incredible profit potential but also hides some enormous risks.  Learn how to develop an investing strategy based of earnings, cash flows, dividends and book values to increase potential for profit and reduce the risks.

Next Extra Profit Created by Value Breakouts

Over the history of US equity markets, the  price of overall markets have risen about 9.1 percent, respectively, compounded annually.  Yet over more than a hundred years of stock market activity,  a majority of the profits have come from just a very few dramatic breakouts.

Equity markets are ruled in the short term by emotions that create unpredictable ups and downs.  Numerous fears of defaults, worries of double dip recessions, high unemployment, concerns about fiscal cliffs, hold investors back.  Yet global population growth and advances in production and prosperity are relentless economic fundamentals that increase value.

When fear holds back a a fundamentally rising value, rising profit potential grows.  Values increase as prices stagnate.  Then markets break free and rocket upwards creating wealth, prosperity and growth.

Find out which breakouts are likely to take place next.

Stocks rise from the cycle of war, productivity and demographics. Cycles create recurring profits. Economies and stock markets cycle up and down around every 15 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns create war.

Here is the war stock cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WWIII) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Learn how the Cyber War (WWIV) may change the way we live and act and how this will affect currencies and investments.

Learn:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios), but his big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of outperformance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  Buffett leverages his portfolio at a ratio of approximately 1.6 to 1.  This rate of expansion by the way is called the “Golden Ratio”.  It is a mathematical formula that controls the growth of most natural things; trees, the shape of leaves, the spiral of shells, as well as the way economies and societies grow.

We’ll sum the strategy, how to leverage cheap, safe, quality stocks and for what period of time based on your circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn how to span the behavior gap.  Behavior gaps are among the biggest reasons why so many investors fail.  Human evolution makes fear the second most powerful motivator.  (Greed is the third.)  Fear creates investment losses due to behavior gaps.  Fear motivates us more strongly than desire.  By nature investors are risk adverse, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

Combine your needs and capabilities with the secrets and the math of our good value model portfolio.

Share ideas about my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.

Markets included in this portfolio are:

• Norway
• Australia
• Hong Kong
• Japan
• Singapore
• United Kingdom
• Taiwan
• South Korea
• China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

Learn how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.  You are investing in a diversified portfolio of good value indices.  A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Learn the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

The results of this test  show how you can gain on any purchase of country ETFs.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip 2017” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Your subscription will be charged $299 a year from now, but you can cancel at any time.

Gary

 

Gary

(1) Dollar chart from pricedingold.com

(2) Grandfather Economic Report

 

Multi Currency Sandwich


The Multi Currency Sandwich answers a question readers often ask… “Why hold assets abroad?”

Why put your savings and investments in a country where investment managers are fixated on a currency that has fallen for almost 40 years?

Instead bank where you can do multi currency investing like the multi currency sandwich.

One Easter about 20 years ago, our newsletter coined the phrase Multi Currency Sandwich.

yen chart

(click on photo to enlarge)

The Japanese yen versus the US dollar ranging from 145 yen to 79 yen per dollar.

I remember the day well because on the Easter Sunday we had invited one of our Austrian bankers and his family for an Easter breakfast.  This was also the day that daylight savings changed.  Merri and I awoke and remembered “Fall Back – Spring Forward”.  However  for some reason we fell back… when forward we should have sprang!

Thinking we had an extra hour instead of one less we were still in our pajamas when the banker and his family… all dressed in their Sunday best, knocked on our front door.

One does not forget days like that.

I also recall a comment I made that day to the banker.  I told him that we were gong to advise our readers to borrow Japanese yen… and invest the loan in Mexican pesos.  The yen had risen in value versus the US dollar from the 140 yen to the dollar range to 111 yen per US dollar.   The yen interest rate was somewhere around 4% and Mexican peso bonds were paying at 12%.

I told him… this will be the most powerful investment advice I have given… ever.

How true that was!

yen chart

The yen immediately strengthened more and rose all the way to 79 yen per dollar.  That scared the heck out of many. Those who bailed lost… in some cases a lot!

My belief was that the yen was over valued even at 111.  My studies suggested that 120 was the correct parity.  This was a yen bubble. Every day that the yen was higher than 120 per dollar was an investing opportunity.

When the bubble burst, the yen fell clear back to 145 yen per dollar.   Readers  who had held on… as I did… made a huge profit.

Yen leverage has remained a wonderful overall long term strategy for 20 years.  Yen interest rates have normally been near or under 3% for 20 years!  Any  loan that was invested for more than 3% enjoyed pure extra profit!

Now the yen is too strong again (in my humble opinion).   Plus as you see below yen interest rates now are as low as 2%.

If I am correct, this is a good time to short the Japanese yen.

There are two easy ways to make this short yen speculation… one is through ETFs.

The way to short the yen is to borrow yen and use the loan to make investments that earn more than 3% in currencies that are likely to rise against the yen.

Let’s look at this borrowing yen approach first using the Borrow Low and Invest High strategy with yen loans.   Then we’ll look at the yen short ETF. 

The recent post at this site on Leveraged Asset Allocation shows how Jyske Bank’s JGAM is leveraging asset allocation portfolios with US dollar and euro loans.  This type of leverage is called hedged leverage because it has no forex risk.   Dollars and euro are borrowed at low interest rates and invested in higher yielding dollar and euro investments.  The added profit comes only from the difference between the loan costs and the yield or capital increase of the investment.

Let’s review a simple Multi Currency sandwich example.

Here are the current invest loan interest rates from Jyske.

JGAM Loan Rates

(Click on photo to enlarge).

In this example we invest $350,000 (we’ll see how to invest smaller amounts in a moment).   We borrow $520,000 in US dollars at 2.62% and $130,000 in euro at 2.5%.  This is the loan ratio used by JGAM at this time and gives us $1 million to invest.

We invest in two bonds. $200,000 is in a bond issued by Santos denominated in euro with a coupon of 8.25%.   The bond comes due 22-09-2070. This is a medium risk bond and yields of about 6.9%.

The second investment is $800,000 in the US dollar denominated bond offered by Danske Bank with a 7.125% coupon due 21-09-2037. This is a medium risk bond yielding about 5.9%.

The return on the Santos bond is appx: $13,800

The return on the Danske bond is appx: $47,200

The total return is  $61,000.

The loan cost in euro is $3,250 (2.5% on $130,000).

The loan cost  in dollars is $13,780 (2.6% on $520,000).

The total loan cost of $17,030 leaves a positive carry (extra profit).  The total return after the loan cost $43,970 or about 12.5% return on the $350,000 invested.   That return is diminished by one time, upfront loan costs on the first year of $1,300.  Then there are no added loan costs for the five year term of the loan.

The figures above are used for illustration purposes only. These are not recommendations as a portfolio would be far more diversified.

The risk in in the bonds… not currency parities.  Euros and dollars were borrowed. Equal amounts of Euros and dollars were invested.

Now let’s look at the same example but with borrowed yen.  The yen loan creates potential forex profit… or loss.

Currently one dollar equals about 82 yen.

Assume the same multi currency sandwich was created… but with $650,000 worth of borrowed yen instead of loans in dollars and euro.

The interest rate for yen is lower… only 2.5% versus 3.125% for the US dollar.   This bumps the return up to almost 12.8%.

However the forex potential is what becomes interesting. At 82 yen per dollar this requires a 53.3 million yen.

Assume that the yen returns to the purchasing power trend of 117 as shown in the chart below.

yen chart

Chart from Bloomberg.com shows the yen at 117

(Click on chart to enlarge)

A shift from 82 yen per dollar to 117 yen per dollar is a 35% drop.   If those dollars and euros bought back yen at the 117 parity it requires only $455,555 to repay that had been worth $650,000.  The forex profit is $194,445 or an extra 29% beyond the positive carry.  If that drop took three years to happen and one held the bonds (and their value did not change)…. the total return over three years would be 67.4%.

That is the upside.  For a loss of the same magnitude the yen would have to rise from 82 yen per dollar to 53 yen per dollar… a highly unlikely event.

If this could be of value to you… be sure to review this with an investment adviser to look at a broader diversification of bonds plus the forex risks… the bond risks as well as the forex and bond purchase and management costs to make sure that such a speculation would work for you.

American investors can get more details and answers from Thomas Fischer at fischer@jgam.com

Non US investors can get details from René Mathys at mathys@jbpb.dk

For Smaller Amounts

JGAM has two types of clients… managed and advisory.  Normally the minimum for US clients managed clients is $200,000 and advisory one million dollars.

With leverage the managed minimum drops to $100,000 with one time leverage and $70,000 with two times leverage.

Canadian and other non US investors have a slightly higher minimum but much greater flexibility and freedom.

JGAM makes all decisions including composition of the loan with managed accounts.  Right now managed accounts have dollars and euro loans as shown in the Leveraged Asset Allocation posting of two days ago.

Advisory clients can choose the funding currency together with their Relationship Manager. The minimum for an Advisory is  1 million unleveraged or $500,000 with one time leverage (medium risk profile) and $350,000 with two times leverage (high risk profile).

Betting Against the Yen for Even Smaller Amounts.

Lou Shinamin at Ruggie Wealth outlined how to sell the Japanese yen short using ETFs.

Lou wrote:  I am watching a very nice cup and handle pattern forming on the Japanese Yen.  Aside from Forex, the easiest way to take advantage of the dollar strengthening against the Yen would be to look at  the ETF :  YCS .  Ultra short Japanese yen.

Get more details on this ETF from Lou Shinaman at lshinaman@ruggiewealth.com

One way for those who cannot open a  JGAM account to get the high bond income and forex potential, but not the positive carry is to buy the bonds from a US broker and buy the short yen ETF.

You can get details for buying the Danske and Santos bonds from Mike McDonald at Aegeon.  Michael McDonald at mmcdonald@aegiscap.com

Multi currency investing offers five enhanced benefits… asset protection…. greater privacy… broader diversification… forex potential and positive carry potential.    Since modern technology makes it as easy to bank in Europe and Asia as next door… these benefits are available to most investors if they learn how to Borrow Low and Invest High.

Gary

Join me with Thomas Fischer, Mike McDonald and Lou Shinaman at our February 1,2,3  Super Thinking + Investing & Business seminar in Mt. Dora, Florida.   See details here.

Save $79. Enroll in the seminar before Christmas and I’ll send our report Borrow Low-Deposit High Free. See details below.

Multi Currency Tug of War


Here is a multi currency portfolio update from Thomas Fischer at Jyske Global Asset Management (JGAM) that can help us during this tug of war environment.

jyske-Global-asset-management- multi-currency

Click twice on photo to enlarge. See an explanation of this Jyske asset allocation below.

JGAM’s analyst Bank Credit Analyst is a Canadian company and it coined the phrase “economic-tug-of-war-environment” so it is not surprising to find an article in the Canadian paper Chronical Herald that we should ponder.

Here is an excerpt from 2012 article “Economic tug of war” by Keith Dicker says:   In Berlin in 1922, Alia Schmidt paid three German marks for a loaf of bread. Six months later, the same loaf cost her 700 marks. The German decision to print money caused inflation to skyrocket.

In Tokyo in 1994, Makishi Satou paid 217 Japanese yen for a McDonald’s hamburger. Eighteen years later, Satou is still enjoying hamburgers, yet he is only paying 216 Japanese yen for the same delicacy.

The Japanese decision to print money resulted in zero inflation. Yet, Satou and others are not at all happy with their money-printing experience and the subsequent 77 per cent decline in their stock market and the 90 pre cent fall in their property market.

Today, the U.S., Europe, Japan and Britain are all printing money and it is fact that only three scenarios are possible:

1) Printing money has absolutely no impact on prices rising or falling.

2) Printing money results in a return to the 1922 German experience.

3) Printing money results in a return to the modern-day Japan experience.

In other words, no one knows quite where to invest and the so called safe investments (such as US and euro bonds) that pay almost nothing might not be safe at all.  However there is a way to increase profits and safety at the same time through leveraged diversification as is described below.

Thomas wrote the JGAM monthly portfolio update yesterday.

gary-scott-seminar-images

Thomas Fischer chatting with a course delegate during a visit to our home for lunch.  Delegates learn a lot during the breaks, meals and get togethers.  Click twice on photo to enlarge.

Here are excerpts from the monthly analysis that Thomas wrote: At our Investment Committee meeting in June we made no new investment decisions, as we felt comfortable with our existing asset allocation and increased exposure to large dividend paying stocks. We felt certain that in the current fragile economic environment the central banks would come to the rescue.

Thursday 5 July the  central banks delivered when the European Central Bank (ECB), People´s Bank of China (PBoC) and the Danish National Bank (DNB) all lowered interest rates. Bank of England (BoE) did not cut interest rates , already at the lowest level in the bank´s history. However the bank injected another £ 50 billion into the economy taking the total to £375 billion.

We are now entering the third quarter and as coined by our research partner Bank Credit Analyst (BCA) a tug-of-war environment dominating the world economy and financial markets.  On the one side the eurozone debt crisis and weak growth will continue to cast shadows over the world economy, and on the other side falling energy costs and monetary reflation will be accommodative for global growth and thereby encourage risk taking.

The negative tug on the world economy is three fold.  A never ending eurozone debt crisis,  a slowing recovery process in the US and China experiencing a slump in exports and manufacturing. The main culprit for the dire situation is the eurozone debt crisis and haphazard response from the European politicians.  We have seen one EU meeting after the next and still with no clear cut solution to the debt problem. It has taken such a long time to deal with the issues at hand, that the crisis has now passed the point where one country (read: Germany) can provide sufficient funds.  The size of the German economy is euro (EUR) 2.6 trillion whereas the total debt of Italy and Spain alone is EUR 2.8 trillion. More meetings will follow before a political compromise can be achieved, but if/when it happens it will be bullish for risky assets. In the US the recovery is stalling, as the household sector is paying down debt,  whilst at the same time the corporate sector is increasing its savings. The US is furthermore heading toward the so called “fiscal cliff” and increased political polarization, which will not be conducive for the overall economy. Chinese economy is also facing headwinds with falling exports, manufacturing and domestic consumption.

The positive tug on the world economy is being provided by falling energy costs, declining interest rates and monetary reflation. The world economy is still balancing on a knife’s edge, but most central bankers seem to have learned a lesson from Japan and are  adamant in their hyper accommodative stance and fight against deflation. We will probably see more aggressive monetary reflation in the coming months and this should help steady the world economy.

We remain in the positive camp and expect equities to outperform bonds even though the eurozone will probably soften overall growth in the world economy.  The flare-up of the sovereign debt issues have also led to a large divergence in the equity markets in the second quarter. The eurozone equity market dropped between 10-18%  whereas the S&P 500 only was down 3%.  Going forward we still expect diverging markets and will focus our attention on markets with the best overall growth prospects.  According to BCA the stock markets of the US, the UK and Switzerland should do better than the average index. We already hold several equity positions in these countries, which has been a major factor in our good performance year to date and strong benchmark outperformance.

We  are of course still dealing with a world that is risky and we also expect volatility going forward.  However at current valuations we still prefer stocks to bonds  and will keep our current asset allocation. According to BCA equity premiums today are well above historical norms and based on past experience this should lead to superior performance of stocks compared to bonds.

Explanation of Asset Allocation

Fixed income:  JGAM is keeping an underweight position, favoring bonds with short duration.

Equities:  JGAM is keeping a neutral to overweight position, favoring large dividend paying companies.

Alternatives: JGAM is keeping a neutral position of holdings in gold and oil as protective investments.

Cash:  JGAM has a neutral position.

Loan mix: All loans for leverage remain unchanged with 100% of the loans in euro.

Leverage: The gearing is kept at a level below maximum.  There is no leverage on the low risk portfolio, 1 times leverage on the medium risk and 2 times leverage on the high risk portfolio.

Here is the Rub

The economic mess that prevails now has been created by too much debt already.  Part of the entire global instability is caused by the never ending eurozone debt crisis.    A debt crisis is caused by too much debt.   Usually the solution to too much debt is not more debt.  However belt tightening is being resisted and creates political and social tensions.  Governments do not know what else to do but lend more.  This makes all government debt dangerous and leads to currency volatility.  There is no place to hide… so one has to diversify into several currencies.    This diversification can be enhanced by regularly adding extra amounts of currencies that look temporarily strong and borrowing currencies that look temporarily weak.

This is what JGAM does with its forex portfolio.

Forex Portfolio

This message focuses on just the JGAM Managed Forex Portfolio

Jyske-jgam-multicurrency-updates-images

JGAMs forex portfolio reveiw.  Click twice on photo to enlarge.

The JGAM managed forex portfolios help us during tug of wars because they are very different from the typical high leverage forex trading that is often leveraged 10 or 20 times.

There are three main differences between this type of portfolio and currency speculation. 

First JGAM bases  its decision more on currency fundamentals rather than technical movements.   Second, JGAM uses far less leverage.  These two tactics allows Second JGAM  to work in wider trading ranges which creates longer trading positions.  This reduces risk and volatility while maximizing profit potential.

Because JGAM is looking for currencies that are seriously out of balance they will often have limited numbers of positions. Right now they have only two positions, the British pound and the euro short the US dollar.  In other words JGAM is betting the the greenback will rise versus these two currencies.

JGAM is also careful to limit the amount a client has in any one position.   For example the size of both current open positions is 20%. This is the percentage of the client’s available Assets Under Management  (the client’s own capital plus leverage).

Example:   If a client has $100,000 invested with a one time leverage the total Assets under management is $200,000 so when a position’s size is 20% the maximum position a client will have is $40,000.

A high risk investor with a $100,000 investment and four times leverage has $500,000 invested and could have at 20% a  $100,000 position.

JGAM is one of the very few investment management companies that can leverage an individual client’s position with any major currency… so when the euro is weak… (as it is now) leverage is in euro.  If the yen or the dollar or pound were weak, leverage could be in that currency.

Multi currency diversification and leverage are powerful combinations.  In good times they create awesome returns.

In tough times… like now… leverage can help improve diversification.

Leverage is very inexpensive… less than 3% and allows a portfolio to be increased into more currencies and shares. If the increased portfolio earns more than 3% extra,  added profits are gained.  Plus the larger portfolio brings extra diversification which enhances the steadiness of the assets.

This is the JGAM medium risk portfolio. Click on photo twice to enlarge.

Jyske-jgam-multicurrency-updates-images

Subscribers to our Multicurrency  portfolio reports can see all the JGAM portfolios and our comments at their password protected site.  Click here.

Learn how to get our report “Borrow Low Deposit High” on how to use leverage and a multi currency password here.

One good way to gain stability in a tug-of-war global economy is to have a diversified portfolio (low, medium or high risk depending on your investment profile) and enhance that portfolio with an investment in the forex portfolio.

For more details contact Thomas Fischer at fischer@jgam.com

Non Americans contact René Mathys at mathys@jbpb.dk

Gary

Meet with Thomas Fischer at our October 5-6-7 2012 International Investing & Business Seminar.  Click here for details.

Better still, meet with Merri and me and Thomas Fischer of JGAM throughout the year free as an International Club member.

Belong to the International Club

The Huge 2019 Risk

Here is a huge risk that could explode in 2019.

I hope I am wrong… but the numbers are clear.

According to Treasurydirect.com, (1) as of December 27, 2018 the cost of interest on the total US public debt of $21,845,329,154,412.01.  Tht’s 23 trillion and 845 billion dollars.

This is not a theoretical problem for the future.  This is not something that our children and grandchildren will have to deal with.  This is a problem in the here and now for you and me.

Rising interest rates create a massive problem for every American.

US debt

The good news is I sent a note like this last year ad I was wrong.

Last year when I sent that note the debt was $20,467,375,664,755.32 (20 trillion+).  The debt has increased almost 1.4 trillion dollars in 2018.

This is good news and bad… the rock and the hard spot.  The bad news is that the rock (US federal debt) is getting bigger….harder to miss.  The Congressional Budget Office (CBO) projected in 2010 (the debt then was a bit over 14 trillion then) that, under law at that time, debt held by the public would exceed $16 trillion by 2020, reaching nearly 70 percent of GDP.

The $5 Trillion Error.

They sure goofed on that.  Here we are… only in 2019 and debt has shot past 21 trillion.

How could the CBO be so wrong? 

The CBO screwed up because they could never imagine that the Fed would push interest rates so low… and keep them there.  The interest rates are so low that the government has been able to borrow more than imagined and still afford the interest.

For example, US Federal government interest last year amounted to around $483 billion on the 20 trillion of debt.  Yet in 2008 on debt of only $9,229,172,659,218.31 (9 trillion +) the interest that year was $451,154,049,950.63 (451 billion +).

Interest payments in 2017 were 7% higher than they were in 2008.  Yet the debt is over 100% higher.  

Very low interest rates have helped the government borrow.  Low interest has also helped the US stocks reach all time high prices.

Now US dollar interest rates are rising.  In 2018 the interest costs were 8.2% higher than in 2017.   Yet the debt increase was only 6.7%.

The government will resist raising rates because it will ruin their budget, cause a collapse of the stock markets and destroy the US dollar.

Here is the very hard spot.  

Rising interest rates, will create an almost unimaginable debt crisis.  If government interest goes to 6% it is like the $20+ trillion national debt  rising to 40 trillion!  Unless there are some huge tax increase the interest payments are not sustainable.

A tax increase?  Last year’s tax act reduced, not increased, revenue.

Learn how to have more freedom and time, less stress, better health care, extra income, greater safety and profit in your savings despite America’s deficits, debt and currency risk.

Fortunately there are secrets that will allow a few to live much better, free of debt and worry despite the decline in the dollar’s purchasing power.   My wife, Merri and I, have traveled, lived, worked and invested around the world for nearly 50 years to gain this information.

Let me share the basics of this data and how we can be of help through 2018.

The first fact behind this secret is that things are really good in the western world.  Despite many problems, we are surrounded by more abundance and greater opportunity than almost anyone has ever enjoyed, anywhere, ever.   To enjoy a fair share of this wealth, all we have to do is understand human nature and learn how to invest in the new economy, as it changes and becomes new, again and again.

Merri and I have made seven huge transitions in the 50 years.  Each has allowed us to always stay ahead of losses that the majority of Americans suffer.  We are in another transition right now and want to share why and what to do so you can stay ahead and live a richer, independent life through 2019 and beyond.

A falling US dollar is one of the greatest risks we have to our independence, safety, health, and wealth, but also brings a window of huge profit as I explain below.   Though the greenback has been strong for a number of years, its strength is in serious jeopardy.  The growing federal deficits increase the national debt and this with rising interest rates propels a growing debt service.

While the Dow Jones Industrial Average passed 25,000, the U.S. national debt passed the $20 trillion mark.

The problem is that the Dow will come back down.  National debt will not fall.

The double shock of money fleeing Wall Street and US debt skyrocketing, will destroy the purchasing power of the greenback.

Go to the store even now.  Statistics say inflation is low, but buy some bread or, heaven forbid, some fresh vegetables like peppers or fruit.   Look at the cost of your prescription or hospital bills.  Do something simple like have your car serviced at an auto dealer.  Look at the dollars you spend and you’ll see what I mean.

The loss of the dollar’s purchasing power erodes our independence, our freedom and our savings and wealth as well. 

At the same time, low interest rates by big banks and higher health care costs soak up the ever diminishing income and savings we have left.  According to a Gallup poll, the most unpopular three institutions in America are big corporations & Wall Street banks, HMOs and Congress.

Yet there is little we can do because these institutions are in control.

Over the last 50 years the average income for 90 percent of the American population fell.  Our health system is restricted by a Kafka-esque maze of legislation and insurance regulations that delay, frustrate, and thwart attempts by patients and doctors from proper medical care.  Big banks and corporations restrict our freedom of choice.  The business customer relationships are no longer transactions between free equals.

Banks can trap us in indebtedness at every age from student loans to mortgages to health care costs.  They pay almost nothing on our savings.  They hide unexpected fees and payments in complex and unreadable documents.  Banks and big corporations routinely conceal vital information in small print and then cheat.  Weak regulations and lax enforcement leave consumers with few ways to fight back.  Many of these businesses ranging from cable TV to phone and internet service to health insurance have virtual monopolies that along with deceptive marketing destroys any form of free market.

These same companies control the credit-scoring agencies so if  we don’t pay unfair fees, our credit scores will plunge and we could lose the ability to borrow money, rent an apartment, even to get a job.  Many consumers are forced to accept “arbitration clauses” in lieu of  legal rights.  The alternative is to lose banking, power, and communication services.

Big business has also usurped our privacy.  Internet companies sell our personal data.  Personal information is pulled from WiFi and iPhones track and store our movements.  The government can access this information, sometimes without subpoenas.  There’s a lot that we don’t know, often withheld under the guise of “National Security.”

The glow on Western democratic capitalism has dimmed… or so it seems.  The US, leading the way, is still a superpower with economic, innovation and military might, but the institutions that should serve the people have become flawed or broken.

America’s infrastructure is in shambles.  The nation’s bridges are crumbling, many water systems are filled with toxins, yet instead of spending more to fix this, we build more prisons.  The 2.2 million people currently in  jail is a 500 percent increase over the past thirty years.  60% of the inmates belong to ethnic groups.  Not just non-white ethnic groups are suffering.  Annual death rates are falling for every group except for middle-aged white Americans.  Death rates are rising among this group driven by an epidemic of suicides and afflictions stemming from substance abuse, alcoholic liver disease and overdoses of heroin and prescription opioids.

America’s middle class is shrinking.  Nearly  half of America’s income goes to upper-income households now.  In 1970 only 29 percent went to this group.  How can we regain our freedom, our happiness and our well being in such a world?

What can we do?

Gain a better, freer life is to combine better health, higher income and greater savings for a happier, more resilient lifestyle. 

Merri and I will celebrate our 50th year of global living, working, investing and researching to find and share ideas on how to have simpler, low stress, healthier, more affluent lifestyles.  Our courses, reports and email messages look at ways to gain:

#1:  Global micro business income.

#2:  Low cost, natural health.

#3:  Safer, more profitable, investments that take little time or cost to buy and hold… so you can focus on earning more instead

Many readers use our services for just one of these three benefits.  They focus only on health or on earning more or on better, easier investing.

28 years ago Merri and I created the International Club as a way for readers to join us and be immersed in all three of these benefits.   The International Club is a year long learning program aimed at helping members earn worry free income, have better affordable good health and gain extra safety and profits with value investments.

Join us for all of 2019 NOW.

The three disciplines, earning, health and investing, work best when coordinated together.  Regretfully the attacks on our freedom are realities of life.  There is little we can do to change this big picture.  However we can change how we care for our health, how we earn and how we save so that we are among the few who live better despite the dollar’s fall.

We start with better lower cost health care.

Club membership begins by sharing ways to be free of the “Secret Hospital Charge Master”.   Just as governments hide truth behind “National Security”, big health care businesses hide medical truths behind “Charge masters”.  Most hospital charge masters are secret because big business does not want us to know how much hospital costs have risen.  Motivations beyond our good health, like corporate greed, want to keep us in the dark about health care cost.

Despite rising health care costs, a report from the Centers for Disease Control & Prevention shows that hospitals are the last place we want to be for good health.  One report shows that hospital-acquired infections alone kills 57% more Americans every year than all car accidents and falls put together.

Often, what patients catch in the hospital can be worse than what sent them there.  Governments and health care agencies agree  – antibiotic resistance is a “nightmare.”  An antibiotic-resistant bacteria may be spreading in more hospitals than patients know.  About one in every 25 hospitalized patients gets an infection and a report from the Journal of Patient Safety showed that medical errors are the third-leading cause of death in the country.

Along with the risk of hospital acquired illness and medical errors, the second huge threat to our well being… is health care costs, especially at hospitals.  This is why charge masters are so often secret.  There are few risks to our wealth that are greater than a hospital stay.

I have created three natural health reports are about:

#1: Nutrition

#2: Purification

#3: Exercise

Each report is available for $19.95.  However you’ll receive this free as club member and save $59.85.

Club members also receive seven workshops and courses on how earn everywhere with at home micro businesses.  We call this our “Live Well and Free Anywhere Program”.   The program contains a series of courses and reports that show ways to earn and be free. These courses and reports are:

  • “International Business Made EZ”
  • “Self Fulfilled – How to Write to Sell”
  • Video Workshop by our webmaster David Cross,
  • The entire weekend “Writer’s Camp” in MP3
  • The report “How to Raise Money Abroad”
  • Report and MP3 Workshop “How to Gain Added Success With Relaxed Concentration”
  • The course “Event-Full – How to Earn Conducting Seminars and Tours”

This program is offered at $299, but is available to you as a club member free.  You save $299 more.

Next, club members participate in an intensive program called the Purposeful investing Course (Pi).  The purpose of Pi is finding value investments that increase safety and profit.  Learn Slow, Worry Free, Good Value Investing.

Stress, worry and fear are three of an investor’s worst enemies.  These destroyers of wealth can create a Behavior Gap, that causes investors to underperform in any market good or bad.  The behavior gap is created by natural human responses to fear.  Pi helps create profitable strategies that avoid losses from this gap.

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

There are seven layers of tactics in the Pi strategy.

Pi Tactic #1: Determine purpose and good value.

Pi Tactic #2: Diversify 70% to 80% of portfolio equally in good value developed markets.

Pi Tactic #3: Invest 20% to 30% equally in good value emerging markets.

Pi Tactic  #4:  Use trending algorithms to buy sell or hold these markets.

Pi Tactic  #5:  Add spice speculating with ideal conditions.

Pi Tactic  #6: Add spice speculating with leverage.

Pi Tactic  #7:  Add spice speculating with forex potential.

The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:

#1:  Current book to price

#2:  Cash flow to price

#3:  Earnings to price

#4:  Average dividend yield

#5:  Return on equity

#6:  Cash flow return

#7:  Market history

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout the next year with you.

This analysis forms the basis of a Good Value Stock Market Strategy.  The analysis is rational, mathematical and does not worry about short term ups and downs.  This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.  Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

The Pi subscription is normally $99 per annum but as a club member you receive Pi at no charge and save an additional $99.

Profit from the US dollar’s fall.

In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

Club members receive a report about opportunity in the  current strength of the US dollar is a second remarkable similarity to 30 years ago.   The dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but when you become a club member you receive the report, “Three Currency Patterns For 50% Profits or More” FREE.

Plus get the $39.99 report, “The Platinum Dip 2019” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

Now there is a new distortion ready to ripen in the year ahead.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Platinum Dip 2019”.   The report explains the exact conditions you need to make leveraged precious metal speculations that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The low price of silver offers special value now so I want to send you this report because the “Platinum Dip 2018” offers enormous profit potential in 2018.

The report “Platinum Dip 2019” sells for $39.95 but club members receive it free as well.

The $39.95 new “Live Anywhere – Earn Everywhere Report” is also free.

There is an incredible new economy that’s opening for those who know what to do.  There are great new opportunities and many of them offer enormous income potential but also work well in disaster scenarios.

There are are specific places where you can reduce your living expenses and easily increase your income.  Scientific research has shown that being in such places actually make you smarter and healthier.  Top this off with the fact that they provide tax benefits as well and you have to ask, “Where are these places?”.

Learn about these specific places.  More important learn what makes them special.  Discover seven freedom producing steps that you can use to find other similar places of opportunity.

The report includes a tax and career plan broken into four age groups, before you finish school, from age 25 to 50 – age 50-to 65 and what to do when you reach the age where tradition wants you to re-tire.  (Another clue-you do not need to retire and probably should not!)

The report is very specific because it describes what Merri and I, our children and even my sister and thousands of our readers have done and are doing, right now.

Live Anywhere – Earn Everywhere focuses on a system that takes advantage of living in Smalltown USA, but earning locally and globally.

This report is available online for $39.99 but International Club members receive it free.

Save $418.78… “plus more” when you become a club member.

Join the International Club and receive:

#1: The $99 Personal investing Course (Pi).   Free.

#2: The $299 “Live Well and Free Anywhere Program”. Free.

#3: The $29.95 report “Three Currency Patterns For 50% Profits or More”. Free.

#4: The $39.99 report “Platinum Dip 2018”. Free

#5: The three $19.99 reports “Shamanic Natural Health”.  All three free.

#6: The $39.99 “Live Anywhere – Earn Everywhere” report. Free.

#7: A year’s follow up subscription to the Purposeful investing course… Plus more.

These reports, courses and programs would cost $527.92 so the 2018 membership saves $117.92.

Join the International Club for $349 and receive all the above online now, plus all reports, course updates and Pi lessons 2019 at no additional fee.

Click here to become a member at the discounted rate of $349

Gary 

(1) www.treasurydirect.gov/NP/debt/current

 

Read the economic tug of war

Global Investment Income


One reason we need global investment income is that the US dollar is falling… and more.

Yesterday’s political turmoil is the most serious we have seen in our fifteen years there.  This may enhance opportunity in Ecuador long term… but also reminds us of  the need to diversify.

There are causes of concern beyond the political unrest. The first being…

dollar chart

the fall of the greenback… Ecuador’s as well as the USA’s currency.

This chart from finance.yahoo.com shows that as of yesterday the dollar had fallen from about $1.20 to buy one euro to $1.37 to buy the same euro.  Since the dollar is the currency of the USA and Ecuador… residents in both countries need to spread their savings and investments into other currencies.

Welcome to October. Our message last week, October Investment Risk warned about the Ides of October and how this can be a bewitching month.

Already on the first day of October we can see several events that could create havoc in global stock markets.

First, the falling US dollar as shown above. Risk adverse investors have been fleeing to dollar bonds. Now where will they go? The ensuing confusion will not be good.

Strikes in Europe. One of our readers who is headed to Ecuador shared this note: Hello from rainy Brussels where I am stuck for an extra two days because of air traffic control strikes which shut down Belgian airspace until tonight.  I am so glad to be away from Europe.  The Spanish and French Air Traffic Controllers have also been on strike for the last few days so traveling by air in Europe is really challenging. Plus a French railway strike started last Thursday.

Strikes in Ecuador. Latin America has been one of the strong performing market segments so instability in this region could be a spark for an October run as well.

Add them together and…. who knows, but you have been warned.

There are great opportunities created by potential problems.  In fact these difficulties are currently creating profit for me.

Take for example the opportunity in the falling US dollar.

In a message Portfoilo Allocations 1-2010 January 14, 2010, I wrote how I had borrowed the equivalent of 9% of my portfolio in US dollars to invest in Mexican peso, New Zealand and Australian dollars.

In another message Global Multi Currency Economic Update July 1, 2010, I wrote:  The biggest of the seven trends I have cashed in on over the past 42 years has been the declining US dollar.

There are several ways to speculate against the greenback.  Personally I use the multi currency sandwich. I borrow dollars at low interest rates and invest the funds on dollar related currencies…. currently the New Zealand, Canadian, Australian dollars and Mexican peso.

This is a slow, partly hedged speculation versus the dollar… but forex profits are not my main goal.   The interest differential is what assures my profit… if I can wait for the dollar to drop.  My loan cost on dollar loans is currently below 3%.   My average yield is 6.31% so I am paid about 3.31% to borrow the dollar.

100K ea.

MXN BONOS  10% Due 2024 117  = 8%

EUR INVT BNK AUD 6.0 2013 101.49  5.56%

EUR INVT BNK NZD 6.5 2014 104.77  5.38%

Average 6.31%  + $18,930
Loan cost      $   9,000
Return           $   9,930

Plus I have Forex profit potential.

So far the year, this loan has been paying me $9,930, plus as the dollar falls I have a chance of a nice extra forex profit over the year. As another chart (of the Mexican peso to the US dollar) from finance.yahoo.com shows, there have been ups and downs all year, but I have made a nice forex profit on the peso I made the loan in 2009.

peso-$-chart

Plus there could be more forex profit if the September 30, 2010 Bloomberg article entitled “Mexico Peso Set for Biggest Gain in 19 Months on U.S. Housing, Employment” by Jonathan J. Levin is correct. This article says: Mexico’s peso is headed to its biggest monthly gain since February 2009 after U.S. housing and employment data limited speculation that the country’s biggest export market may return to recession.

The peso rose 5.2 percent to 12.5511 per dollar at 9:58 a.m. New York time, from 13.2046 on Aug. 31, the best- performing major Latin American currency tracked by Bloomberg. It gained 2.5 percent during the third quarter. The U.S. buys 80 percent of Mexico’s exports.

“All the fears of a double-dip recession in the U.S. are dissipating,” said Ramon Cordova, a currency strategist at Base Internacional Casa de Bolsa SA in Monterrey, Mexico. “I see a positive outlook for the rest of the year.”

U.S. initial jobless claims decreased more than forecast, by 16,000 to 453,000 in the week ended Sept. 25, Labor Department figures showed today in Washington. Claims were projected to fall to 460,000, according to the median forecast of 47 economists surveyed by Bloomberg News.

Builders broke ground on 598,000 homes at an annual rate in August, up 10.5 percent and the most since April, the Commerce Department said Sept. 21.  The yield on Mexico’s 10 percent bond due in 2024 rose four basis points, or 0.04 percentage point, to 6.48 percent, according to Banco Santander SA. The price of the security fell 0.5 centavo to 132.58 centavos per peso.

Plus my bonds in Australian and New Zealand dollars have brought a forex profit as well as the finance.yahoo.com charts show.

Here is the Aussie and…

ecuador-opportunity

the Kiwi.

nz-$-chart

The Kiwi forex profit is not much… but keep in mind my loan has cost 3% the Kiwi dollar bond has paid me 5.38%.

This does not mean you should run out and invest in Mexican, Australian and New Zealand dollar bonds.

This was the ripe investment a year ago.

Now with investors rushing into bonds… prices are not as attractive.  They may fit as part of one’s portfolio, but we have been looking more at high yield equities.

We’ll review 54 such equities in dollars, Singapore dollars, euro and other currencies at our October seminar.

Plus there is opportunity in real estate… almost everywhere.

Plunging real estate prices…. low interest rates and future inflation are three ingredients for explosive profits.

One of the high yielding shares shares I like philosophically is the Suntec REIT in Singapore.

Real estate makes a lot of sense to me now. Real estate prices have been crashing and creating some great values.  Asian real estate makes a lot of sense and Singapore is one of the most trustworthy places to invest in Asia.

Suntec Real Estate Investment Trust (SUN SP) is one of two Singapore-traded REITs controlled by Hong Kong billionaire Li Ka-shing. Li used to be a neighbor long ago when I lived in Hong Kong and is very shrewd, needless to say.

singapore-casino

New Singapore Casino.

Singapore has allowed two casinos to open.  I am sad to see this as Singapore used to have strict attitudes about gambling and casinos.  Lee Kuan Yew once said there would never be a casino in Singapore but these are two lavish locations opened in 2010, that will attract tourists and gamblers. Suntec’s main property is next door.

With just two casinos Singapore has already become a rival to Las Vegas.

Second quarter 2010 winnings put Singapore on track to have a $4 billion casino market on an annualized basis according to the Wall Street Journal. That’s just 20% below what Las Vegas is expected to do this year.

Suntec REIT’s has office and retail property next to the new casinos.  Suntecs office portfolio has 97.6% occupancy while the retail portfolio has 98.7% occupancy.

Asia has great potential and the Singapore dollar has excellent underpinnings.

Phillip Securities Research meanwhile is holding its forecasts and projections and maintains the Hold recommendation with fair value of $1.34. “We think management has done a good job in maintaining occupancy for the retail portfolio and improving the occupancy for the office portfolio. Note that office portfolio occupancy improved from 94.8% in 2Q09. Although reversionary rents probably softened in the wake of this, nonetheless leases were secured and mitigated the risk of tenants migration.”

The good thing about REITs is their stable dividends,” this time when bank deposits have very low interest.  Individual investors pay zero tax on the distributions, regardless of their nationality.

Singapore-listed REITs are required to distribute at least 90% of their taxable income to unitholders, which makes them more attractive to those seeking dividends.

Suntec REIT ticker symbol of (SUN.Singapore), owns premium retail and office properties in Singapore next to new casinos. The company has paid uninterrupted dividends every quarter since it went public in 2007.

The shares are also traded on the Frankfurt exchange with the symbol (Frankfurt: P3G.F)

Smaller investors can participate in this trend also as there are numerous US mutual funds that invest in these type of shares.

A September 20, 2010 Morningstar article “Yield to Yield – Some dividend funds offer more, or less, than investors bargain for” by Katie Rushkewicz says: Income-seeking investors have been in a tough spot lately. Bond, CD, and money market yields are paltry. Pitiful fixed-income yields might make stock dividend yields look attractive by comparison, but they come with extra company-specific and market risk. The 15% tax rate that most stock dividends have enjoyed for the past seven years could expire at the end of the 2010.

However, more companies seem well-situated to reinstate or increase their payouts after using the aftermath of the financial crisis to pay down debt, bolster balance sheets, and amass cash. Some high-quality companies, like  Johnson & Johnson JNJ, even offer dividend yields higher than the yields on their 10-year corporate bonds. This rare phenomenon makes dividend-paying stocks more appealing to income-seeking investors. So does market volatility, because dividend-paying companies tend to be defensive.

Funds That Do It Well

Dividend funds can assume many identities, so it’s important to know what you’re getting into before buying. Some fund shops and managers have built long, successful track records using dividend-focused strategies.

Funds mentioned favorably include:

* Legg Mason ClearBridge Equity Income Builder (SOPAX) – Minimum investment $1,000.

* Vanguard Dividend Growth (VDIGX) – Minimum investment $3,000.

* American Funds Washington Mutual (AWSHX) – Minimum investment $250.

Gary

Join us next week at our North Carolina Conference, Autumn in the Blue Ridge. Learn about real estate in the USA, Ecuador and Singapore as well as see a review of 54 high yielding shares.

Read Mexico Peso Set for Biggest Gain in 19 Months on U.S. Housing, Employment

Read Yield to Yield  Some dividend funds offer more, or less, than investors bargain for

See more on Suntec Reit

Jyske Global Asset Management Seminars


Jyske Global Asset Management seminars in 2010 may help your portfolio survive and grow.

Sadly at a time when American investors need more multi currency investments and a better global view, overseas banks are increasingly restricted from helping US investors.  Anti tax evasion, money laundering and anti terrorism regulations have created so many regulations on banks that increasing numbers of overseas banks have stopped accepting US investors.

Yet at this crucial time when the US dollar has great fundamental weakness, US banks have little experience in helping its clients invest in other currencies.

This is why Jyske Banks upcoming April 2010 Forex Seminar in California may be helpful to you.

multi-currency-debt

I talked about green investing with these speakers at the Jyske 2009 Naples seminar.  Here I am with other speakers, Left to right: Samuel Rachlin,  Rich Checkan, Steve Blumenthal, Joe Cox, John Mauldin, Gary Scott, Lars Stouge. Thomas Fischer Moderating.

Fortunately for me and readers,  Jyske Bank in April 2008 set up Jyske Global Asset management as an Asset Management Company servicing US clients called JGAM.

During the first 9 months JGAM  had to help their US clients cope with the worst financial crisis since the thirties.

They changed the investment strategy accordingly and over weighted their clinets portfolios in defensive investments.  During 2009 they became cautious optimists and began increasing the exposure towards equities and corporate bonds.

All investment decisions in JGAM are carried out by an Investment Committee who meet at least once a month.  Every member in the committee has responsibility for an asset class.

JGAM offers a number of portfolio’s depending on the size ranging from low risk to high risk… with or without leverage.

Since May of 2009 JGAM  also offers managed IRA accounts.

JGAM’s portfolios have performed very well in 2009  and the performance opf their client’s portfolios range from 10-33% depending on size and risk profile.

The IRA portfolios which were established in May 2009 has returned between 12% – 18%.

JGAM offers two types of multi currency service for US investors.

US investors can have a fully managed portfolio or have an advisory account where they make their own decisions.  For clients living in the US the advisory accounts come with many investment restrictions.

Managed portfolios are best for most US resident Americans.

Americans living outside the US can have advisory accounts without limitations regarding the investments.

Jyske Bank Copenhagen is the custodian for all JGAM accounts and for larger clients Jyske offers a VISA debit card associated with the account.

The VISA card comes with restrictions. It is a debit not credit card and normally requires a minimum balance of two times the spending limit PLUS  a minimum  investment account with JGAM of $50,000.

JGAM maintains a close relationship with its clients, makes regular visit to the US and provides a direct phone line for each client to an investment adviser.  JGAM also visits its clients in Ecuador as they participate in seminars that I and International Living conduct in Ecuador.

Beginning in 2009 JGAM also started conducting  their own seminars.

Last years seminar was in Naples Florida.

The 115 delegates reported that they really gained from listening to what we had to say and…

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talking among themselves during the coffee brakes and at meals.

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One benefit of these seminars is talking to an overseas banker.  Here I am at the seminar  with my Jyske account executive Anders Nielsen.

brazilian-bond-distortion

In April 2010 JGAM will conduct a Foreign Exchange seminar in Laguna Beach California.   In August JGAM will venture with Jyske Bank to conduct a seminar in Copenhagen.

JGAM is a fee based only company. Their only objective is to make money for their clients.   All JGAM employees, as with Jyske Bank,  are on a fixed salary WITHOUT BONUSES.

2009 was an extraordinary year and JGAM does not expect a repeat in 2010 as they expect central banks to begin withdrawing liquidity from the market.

JGAM does expect some interesting theme based investments in 2010. Clean energy will probably play an important role as governments across the globe focuses on the climate.  JGAM believes that the “climate aspect” has to be integrated into future investments, and that such a strategy can offer good returns.

They have already invested in iShares S&P Global Clean Energy Index.

This Exchange Traded Funds (ETF) aims to track the S&P Global Clean Energy Index and offers exposure to 30 of the largest publicly listed companies around the world that are involved in clean energy related businesses.

JGAM expects many country’s to tighten monetary policy (Australia and Norway have already started) which will create tension and volatility in the currency market.

JGAM plans to take advantage of these investment possibilities also in 2010.

Merri and I will join JGAM  at their Laguna Beach seminar where you can be introduced to foreign exchange trading and investing in general. I will speak at the seminar and review my portfolio… why… what and what if.

The Laguna Beach forex seminar will be conducted 30 April  to 2 May 2010.

You will have the opportunity to:

• find out about JGAM’s BRAND NEW upcoming Managed FX Portfolio

• find out how JGAM  use’s currencies in our portfolios

• find out how you can take advantage of the profit
opportunities available with foreign exchange trading

• learn about and ask any FX questions that you didn’t dare to ask

• discuss key foreign exchange topics in greater depth than normal

• network with currency experts and JGAM’s experts.

For more details about the seminar contact Thomas Fischer at fischer@jgam.com

Gary

How to Make Money in the Multi Currency Era


The US and Ecuador property market offers a rare opportunity to make money in this multi currency era. Here is an excerpt from a recent multi currency update.

Two economic forces have come together to create extra special profits.

I know because the same  combination occurred in London during the late 1970s and allowed me to increase an investment eleven times in two years by buying property then.

Earlier in 1970 I had lived in London, England for a year, then moved to Hong Kong. During that time I also maintained a home outside of San Francisco, California.

This was a time of great inflation. My homes in California and in Hong Kong appreciated greatly. In the mid 1970s, when I moved from Hong Kong back to London, I noticed that London real estate was priced about the same as it had been in 1970. This puzzled me. Why had London property prices remained flat despite inflation?

On investigation, I learned that there had been a huge real estate crash in 1970 which continued to dampen real estate prices six years later despite the rampant global inflation. I felt this was a great distortion as European property prices had risen, but London prices had not. Yet London offered the best utility as the center of the English speaking world. This, to my way of thinking, created a huge distortion.

It’s late 1976. Britain faced  a sterling crisis. In less than two years the pound has fallen from $2.40 to $1.60. Investors had no faith in the British economy, or the government that ran it. The government’s budget was a mess.  Investors  were ditching the pound.

The plummeting pound pushed the economy to breaking point. Prime Minister Callaghan, in desperation borrowed as much as possible, £2.3 billion from the IMF.

At that time, the British pound collapsed to its lowest level ever (a pound per dollar for a short time) so the distortion widened. This meant in US dollar terms London property had dropped almost 50% while property in other major cities of the western world had increased in price by three or four times.

london-house

The house I bought was right next door and very similar to this house in Bedford Park, London W4.

This house in West London was 34,000 pounds, 9,000 pounds down (then $9,000).   I took a mortgage for 25,000 pounds ($25,000).  I lived in the house and three years later the pound had recovered to 2.2 dollars per pound plus London real estate had caught up with property in other major western centers. I sold the house for 115,000 pounds or $253,000 a profit of $244,000 on a $9,000 investment.

Now it’s the US dollar that is very low.

You will have seen articles something like the the September 7, 2009 Bloomberg article “Weak Dollar? Currency, at 10-Year Low, May Fall More” by Bo Nielsen.

An excerpt says: Anyone who says the dollar is weak after it fetched a record-low $1.3681 against the euro and the fewest pence against the pound in 25 years is expressing a euphemism.

The currency may decline at least another 10 percent by the end of 2008, say Jay Bryson, an economist at Wachovia Corp., and Kenneth Rogoff, the former chief economist at the International Monetary Fund. The dollar has only fallen 3.4 percent in the past two years to a 10-year low, according to a Federal Reserve index that weighs trade with 38 countries including China, Mexico, Canada and countries in Europe. It tumbled 30 percent in the three years ended 1988.

“Dollar weakness will be broad-based and could last for years,” said Bryson, a global economist at Charlotte, North Carolina-based Wachovia who previously analyzed currencies at the Federal Reserve.

Investors are dumping dollars, lured by higher returns elsewhere. The U.S. will grow more slowly than Europe for the first time since 2001 and Japan for the first time in 16 years, the IMF forecasts. The difference in yield between 10-year German bonds and Treasuries has shrunk to the smallest since 2004.

Those who read this site regularly or subscribe to our multi currency course know that I reported my personal portfolio and recommended getting out of the US dollar in February 2009. See that recommendation here.

I showed that my portfolio was 86% out of the greenback.

My liquid portfolio currency allocation was reported as Brazilian real  4%,
 Denmark kroner  33%
,  euro 31%
, British pound 10%
, Turkey lira 8%
, US$ 14%.

I also mentioned in February that I was going to start buying Florida real estate.

So Merri and I began looking and in our research found that there appears to be a hole in the market for Central Florida property selling in the million to $750,000 range.  There seems to be no buyers at all. We have been watching prices tumble hundreds of thousands.

We are viewing one property next week that started at $800K+. It just dropped $100,000 last week from $395,000 and is now down to $295,000.

This is about a 25% drop in that house’s price in six months. That’s pretty good!

Now look at what this means in depreciated dollar terms.

dollar-chart

Here is a chart of the euro to US dollar from yahoo.finance.com from February 2009 to September 10, 2009 when this was written.

In February a US dollar bought .80 euro so that house at $395,ooo cost 319,200 euro.  Now a US dollar buys about .68 euro so this house at $295,000 costs about 200,000 euro.

That is a drop in that house price of 37% in six months in terms of euro. That’s even better!

Here is the magic in this hidden, built-in profit.  For most of the market, the profit is hidden.  Most investors are not comparing currencies and real estate prices.  Yet these distortions will filter through. Eventually European investors…. or those like me who are holding currencies other than dollars will see this distortion and cash in.

I, and now you, just have an advantage because we are always looking at both markets… currency and real estate.

Ecuador Real Estate Cheaper as Well

This also creates better value on Ecuador real estate. Take for example one penthouse property I am selling at $139,000.

This is a perfect property for those who want peace… quiet…and instant access to miles of empty, warm Pacific beach.

ecuador beach rentals

This two room, top floor penthouse is at Palmazul and includes use of the the swimming pool, tennis courts… and spa.   You can dine here, one floor below.

ecuador beach rentals

The units are fully equipped… kitchen…

Ecuador beach rentals

with full size fridge.

Living room…

Ecuador beach rentals with a view…

Ecuador beach rentals leading…

Ecuador beach rentals to large private balconies…

Ecuador beach rentals with these views…

ecuador beach rentals

and sunsets to kill for.

ecuador beach rentals

Long walks on the beach… you can amble at low tide for ten miles and not see a soul.

ecuador-seminars

Luxury bathrooms with bathtub…

Ecuador beach rentals

and a king size bed with view and caressed by the ocean breeze.

Ecuador beach rentals

This unit would have cost 111,000 euro in February. Now the price has dropped to 94,500 euro… just from the dollar’s fall.

The US and Ecuador property markets offers a rare opportunity to make extra profit now because of hidden added value from the US dollar’s fall. History suggests that real estate is a real asset so its price rises as the currency its counted in falls.

These corrections take time because most property owners do not calculate their property in multi currency terms.  Those of us who watch this can gain extra profit now.

The article above is an excerpt from a recent Multi Currency update. Learn more about multi currency investing. Subscribe to our multi currency course.

Gary

The greatest asset of all is the ability to earn globally in many currencies.

This is why we are providing a special three for one offer with our  course Tangled Web… How to Have an Internet Business. This can help you create your own internet business.

Our emailed course “Tangled Webs We Weave – How to Have Your Own Web Based Business” is a continuing educational program.  You receive the first 28 lessons when you enroll and a new lesson every week or two.

This course teaches how to create a web based business and is developed from the ongoing experiences that we have from our successful and profitable internet business.

This course is well worth the enrollment fee of $299… but currently you also receive two additional courses FREE.

The other two courses are #1: International Business Made EZ, and #2: Self Fulfilled – How to be a Self Publisher.

These two courses have sold for $398 and thousands have paid this price. We add them to your course at no added cost as I believe they will help you develop a better business in these crucial times.

Even Better Get All three Courses Free

To make this offer even more compelling,  I am giving everyone who enrolls in our North Carolina or Ecuador International Business & Investing seminar in October or November all three courses, “Tangled Web… How to Have an Internet Business Course,”  “Self Fulfilled- How to be a Self Publisher” and “International Business Made EZ” free.

Join us with Jyske Bank and my webmaster David Cross in West Jefferson North Carolina. Learn more about global investing, how to have an international business at the seminar.

Oct. 9-11 IBEZ North Carolina with our webmaster  David Cross & Thomas Fischer of JGAM

Or head south to Ecuador!

October 16-18 Ecuador Southern coastal tour

Oct. 21-24 Ecuador Import Export Tour

Oct. 25-26 Imbabura Real Estate Tour

Join us with Peter Laub of Jyske Global Asset Management in Ecuador. Learn more about global investing, how to have an international business at the seminar.

Nov. 6-8 IBEZ Ecuador Seminar

Nov. 9-10 Imbabura Real Estate Tour

Nov. 11-14 Ecuador Coastal Real Estate Tour

Join us in the mountains and at the sea. Attend more than one seminar and tour and save even more plus get the three emailed courses free.

Attend any two Ecuador seminar or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799

Read the entire articles:

Weak Dollar? Currency, at 10-Year Low, May Fall More

Dollar Is Near Lowest in Almost Year as Borrowing Costs Plunge

International Currencies Made EZ


International Currencies Made EZ is a total of 15 chapters and about 150 pages. You can access each chapter from here plus a Glossary of terms FREE below.

This course was last updated some years ago. We are pleased to share this information with you as we think you will find the currency principles as relevant as when this course first appeared. However many of the contact names and addresses will have changed and many of the statistics are not up to date. If you wish to make a specific contact and the details in this course are incorrect, please contact us and we will try to help you. Thank you.

See how to get an updated report on multi currency investing here.

Links for the FREE International Currencies Made EZ

You will find more information relevant to International Currencies Made EZ in the following pages:

Gary

See how to get an updated report on multi currency investing here.

How We Can Serve You

How to Have Real Safety

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There are only three reasons why we should invest.  We invest for income.  We invest to resell our investments for more than we had invested.  We invest to make our world a better place.

We should not invest for fun, excitement or to get rich quick, or in a panic due to market corrections.

This is why the core Pi model portfolio (that forms the bulk of my own equity portfolio) consists of 19 shares and this position has not changed in over two years.  During these two years we have been steadily accumulating the same 19 shares and have not traded once.

The portfolio has done well in 2017, up 22.6%, better than the DJI Index.

motif

However one or even two year’s performance is not enough data to create a safe strategy.

The good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around models that date back 91 and 24 years.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets developed combining my 50 years of investing experience with study of the mathematical market value analysis of Keppler Asset Management and the mathematical trend analysis of Tradestops.com.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers, such as State Street Global Advisers, use his analysis to manage over $2.5 billion of funds.

The Pifolio analysis begins with Keppler who continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  He compares each major stock market’s history.

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Michael Kepler CEO Keppler Asset Management.

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy and rates each market as a Buy, Neutral or Sell market.  His analysis is rational, mathematical and does not cause worry about short term ups and downs.  Keppler’s strategy is to diversify into an equally weighted portfolio of the MSCI Indices of each BUY market.

This is an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required.  You are investing in a diversified portfolio of good value indices.

A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to spend hours of research aimed at picking specific shares.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.  Investing in the index is like investing in all the shares in the index.  You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pifolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally use.

70% is diversified into Keppler’s good value (BUY rated) developed markets: Australia, Austria, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore and the United Kingdom.

30% of the Pifolio is invested in Keppler’s good value (BUY rated) emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

The Pifolio consists of iShares ETFs that invested in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Australia.

iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.

Pi uses math to reveal the best value markets then protects its positions using more math created by Richard Smith founder and CEO of Tradestops.com to track each share’s trend.

We use Smith’s  algorithms that calculate momentum of the good value markets.

dr richard smith

The Stock State Indicators at Tradestops.com act as a full life-cycle measure that indicates the health of each stock. They are designed to tell you at a glance exactly where any stock stands relative to Dr. Smith’s proprietary algorithms.

Kepppler’s analysis shows the value of markets.  The SSI signal indicates the current trend of each stock (performing well, or in a period of correction, or stopped out).

The SSI tells you one of five things:

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Akey component of the Stock State Indicator (SSI) system is momentum based on the latest 521 days of trading.  A stock changes from red to green in the SSI system only after it has already gone up a healthy amount and has started a solid uptrend.

How SSI Alerts Are Triggered

If the position has already moved more than its Volatility Quotient below a recent high, the SSI Stop Loss will trigger.  This is an indicator that the position has corrected more than what is normal for this stock.  It means to take caution.

Below is an example of how SSIs work.  This example shows the Developed Market Pifolio that we track at Tradestops.com.

tradestops

Equal Weight Good Value Developed Market Pifolio.

At the time this example was copied, all the ETFs in the Developed Market Pifolio (above) currently had a green SSI.

We do not know when the US market will fall.  We only do know that it will.  We also do not know if, when the US market corrects, global markets will follow or rise instead.

The fact that the Pifilios are invested in good value markets reduces long term risk.

Additional protection is added by using trailing stops based on the 521 day momentum of each stock in the Pifolio.

Take for example the graph below from our Tradestops account that shows the iShares MSCI United Kingdom ETF.  This ETF had a green SSI and a Volatility Index (VQ) of 13.26%.  This means the share can move 13.26% before there is a trend shift.

tradestops

iShares MSCI United Kingdom ETF (Symbol EWU)

Pi purchased the share at$31.26 and in this example the share was $34.43 and rising.  Tradestop’s algorithms suggested that if the price drops to $31.69 its momentum would have stopped and it would have shifted into trading sideways.   The stop loss price is currently $29.86.  If EWU continues to rise, both the yellow warning and the stop loss price will rise as well.

When the US stock market bull ends, know one knows for sure how long or how severe the correction will be.

When the bear arrives, what will happen to global and especially good value markets?

No  one knows the answer to this question.

What we do know is that the equally weighted, good value market Pifolios have the greatest potential long term and that math based trailing stops can be used to protect against a secular global stock market correction when it comes.

My fifty years of global investing experience helps take advantage of numerous long term cycles that are part of the universal math that affects all investments.

What you get when you subscribe to Pi.

You immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

Included in the basic training is an additional 120 page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

You also receive two special reports.

In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

I did well then, but always thought, “I should have invested more!”  Now those circumstances have come together and I am investing in them again.

The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar.  The two conditions are in place again!

30 years ago, the US dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I have created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but in this special offer, you receive the report, “Three Currency Patterns for 50% Profits or More” FREE when you subscribe to Pi.

Plus get the $39.95 report “The Platinum Dip 2018” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events over the last two years.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80, compared to a ratio of 230 only two years before.

In September 2015, I prepared a special report “Silver Dip 2015” about a silver speculation, leveraged with a British pound loan, that could increase the returns in a safe portfolio by as much as eight times.  The tactics described in that report generated 62.48% profit in just nine months.

I have updated this report and added how to use the Dip Strategy with platinum.   The “Platinum Dip 2018” report shares the latest in a series of long term lessons gained through 40 years of speculating and investing in precious metals.  I released the 2015 report, when the gold silver ratio slipped to 80.  The ratio has corrected and that profit has been taken and now a new precious metals dip has emerged.

I have prepared a new special report “Platinum Dip 2018” about a leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.

You also learn from the Value Investing Seminar, our premier course, that we have been conducting for over 30 years.  Tens of thousands of delegates have paid up to $999 to attend.  Now you can join the seminar online FREE in this special offer.

This three day course is available in sessions that are 10 to 20 minutes long for easy, convenient learning.   You can listen to each session any time and as often as you desire.

The sooner you hear what I have to say about current markets, the better you’ll be able to cash in on perhaps the best investing opportunity since 1982.

seminars

Tens of thousands have paid up to $999 to attend.

In 2018 I celebrate my 52nd anniversary in the investing business and 50th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns can create war.

The chart above shows the war – stock market cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WW III) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Details in the online seminar include:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios). His big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

The online seminar also reveals  the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed this test.

I have good news about the cost of the seminar as well.   For almost three decades the seminar fee has been $799 for one or $999 for a couple. Tens of thousands paid this price, but online the seminar is $297.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Platinum Dip 2018” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Gary