Tag Archive | "stock markets"

Why Not Reduce Emerging Markets Now?


One benefit of your Purposeful Investing Course subscription are updates of the Keppler Asset Management’s Good Value Emerging Market Country Selection Strategies.  

The June 2020 updates shows one reason we should not abandon emerging markets. Currently they pay a higher dividend and have had the strongest appreciation this year.

stock markets

When I lived in Hong Kong, my apartment had views like this though the buildings were older and smaller at that time.

Moving to Hong Kong at age 21 was a real revelation to me.  I arrived n the late 1960s with the idea of selling US mutual funds to the Chinese, but ended up selling the idea of investing in Hong Kong shares to Americans.

That time in Asia broadened my horizons and led me to see the opening and rapid rise of emerging markets around the world.  We helped many thousands of readers get on that band wagon.  For many years emerging markets were the best investment of all.

Though Hong Kong is no longer considered an emerging market, we can gain some lessons from the Hong Kong stock market this last month, as China revoked the city’s special privileges as an autonomous entity.

The first lesson is to have global view.

At the end of May, 2020, the United States revoked Hong Kong’s special status under US law, opening the way for the city to be stripped of trading privileges, as Washington accused China of trampling on the territory’s autonomy. (1)

Yet the Hong Kong market rose 11% in June making it the best performing stock market in the world for the month of June 2020.  China was the second best performing market in the world with an uptick of 8.8%.

What’s up?

According to a Forbes.com article (2) President Donald Trump said he will revoke Hong Kong’s special status with the United States, including a reversal of tariff benefits and the potential for sanctions against Chinese and Hong Kong authorities in Hong Kong.

Trump said he would order his Administration to “revoke preferential treatment for Hong Kong as a special customs and travel territory from the rest of China” and asked said he was ask Treasury to sanction Chinese government and some Hong Kong officials directly or indirectly involved in the “eroding of Hong Kong’s freedoms. Our actions will be strong and meaningful.”

The iShares MSCI Hong Kong (EWH) (one of the holdings in the Pi portfolio) actually rose on the news.

It turns out that the restrictions may hurt US businesses more than it hurts China.

The problem is that if Hong Kong matches any U.S. trade action, U.S. exporters, especially when it comes to agricultural products,” may be hurt.

Hong Kong is the seventh-largest importer of U.S. agricultural products and over 1,300 companies have operations in Hong Kong. Foreign direct investment in Hong Kong totaled $82.5 billion in 2018. This is 1.4% of total U.S. foreign direct investment.

Damage to US business interests would likely be significant if restrictions are imposed. It could even be possible that U.S. banks have to withdraw from Hong Kong.

So lesson number two from Hong Kong is that though the US economy is still huge, it is no longer so supremely significant that it has to be involved from other economies to do just fine.

If the US becomes increasingly isolationist, US business may suffer as much or more than emerging nations.

Here are excerpts from the eight page July 2020 Keppler Asset Management emerging markets update  we recently sent Pi subscribers,

Recent Developments & Outlook

Keppler wrote: Emerging markets equities continued their recent uptrend, buoyed by strong worldwide monetary and fiscal stimulus.

China, South Africa (both up 8.8 %) and Brazil (+8.6 %) had the highest returns last month, while Greece (-3.7%), Russia (-1.2%) and Thailand (-0.8%) lost least.

Year-to-date, twenty-five markets are down—on average by 14.3%. China (+3.4%) was the only winning market year-to-date, while Greece (-39.2%), Colombia (-37.1%) and Peru (-29.1%) performed worst.

Performance is in local currencies unless mentioned otherwise.

There are two changes in our country ratings this month. Due to poor fundamental developments, Poland and Turkey were downgraded to “Neutral” from “Buy”.

The proceeds are reinvested in the remaining ten markets of the Top Value Model Portfolio: Brazil, Chile, China, Colombia, the Czech Republic, Korea, Malaysia, Mexico, Russia and Taiwan.

According to our analyses, an equally weighted combination of these most attractively valued markets offers the highest expectation of long-term risk-adjusted performance.

The following table shows how the Emerging Markets Top Value Model Portfolio compares to the MSCI Emerging Markets Index, the MSCI World Index and the MSCI EM Growth Index at the end of June 2020 based on selected valuation and return measures:

keppler 7 20202

According to our analyses, the asset class Emerging Markets Equities is now undervalued by 23 % compared to the MSCI World Index of the developed markets.Moreover, the Emerging Markets Top Value Model Portfolio is undervalued by 26% compared to the MSCI Emerging Markets (Standard) Index, by 43% compared to the MSCI World Index and by a whopping 62% compared to the MSCI EM Growth Index.

This makes Emerging Markets Value one of the most attractive asset classes among global equities.

Michael Keppler

New York, July 3, 2020

P.S. Due to liquidity issues and geopolitical risks, we are assigning lower than equal weights to smaller markets in the portfolios we advise.

Hong Kong had the highest growth in June 2020 and the next three best performing stock markets in the world this June 2020, were emerging markets.

In addition the Top Value Emerging Markets currently pay a higher average dividend yield (3.81%) than the developed markets (3.27%).  These dividends are much higher than what can be earned from US companies or AA rated bonds.

Our purposeful Investing Course (Pi) has a balance of 70% in developed markets and 30% in emerging markets.

Gary

Add Safety & Get Paid 154% More

Get paid more now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not right now.

This chart from the New York Times article “The Mystery of High Stock Prices” (1) shows that equities pay a higher yield than bonds.

wsj.com

Most Important, Get Paid the Most Now!

Just because US stocks pay more than dollar denominated bonds, does not mean they offer the best income deal.  In fact the chart below shows that US shares pay one of the lousiest yields of the 46 stock markets we monitor around the world.

The US MSCI Index pays a modest 1.91%.  That’s a terrible yield, but better than the 1.6% you can get in AA rated corporate bonds.

Nine solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay 71% higher yield, 3.27% compared to the US yield of 1.91%.

This is why my core stock portfolio consists of a handful of top value share ETFs and this position has hardly changed in five years. 

Let me explain why this strategy adds safety, increases long term appreciation potential and pays almost double short term income right now.

In a moment, I’ll show how to push that yield to 4.07% per annum without adding additional risk.

keppler62020

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only three times, so my trading costs, my fuss, fiddle and time spent have been kept to an absolute minimum.

I have been investing in iShare country ETFs.  Each one invests in the MSCI Index of one of the top (or neutral in the case of Canada and Australia) value markets above.

My strategy protects against stock market volatility and yet has potential for the best gains long term from rising share prices by holding an equally weighted portfolio of the best value based country ETFs.

The Purposeful Investing Course tracks 46 stock markets around the world into determine which markets offer the best value.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Plus Value ETFs are Safer

The people who dominate stock markets include a pack of thieves.  This fact has always been true.  We were recently reminded of this fact when Wirecard AG, one of Europe’s most prestigious companies, listed on Germany’s premier stock-market index, the Dax 30 fooled everyone including its top grade, longtime auditor, Ernst & Young GMBH.

The shares in German fintech company Wirecard AG (symbol WDI fell 63.74% as it filed for insolvency proceedings, after revealing that more than $2 billion in cash missing from its balance sheet was all a fraud.  The company’s market value fell to less than €500 million from almost €13 billion in a week.

Investors have seen this type of rip off again and again, really big scams from Enron to Bernie Madoff and these are just the tip of the iceberg.

Shares in stock markets are manipulated all the time.  Stock markets (in fact almost all types of markets) are led by sharks plain and simple.  Count on this fact.  This is the nature of the beast and the number one goal of many big businesses is to take as much of your money as they can to line their pockets.

In the Wirecard AG example many  thousands of investors have seen their hard work, their thrift, their security and hopes for the future disappear, even though they seemingly did everything right by investing in a blue chip, new era, high tech company.

A study of 92 years of investment returns shows that, despite the fraud and cheating and deceit, stock markets are still a good way to make your money grow… if you invest long term and diversify.

keppler

Our Pi strategy makes it harder for cheaters to grab your wealth because it’s very hard to manipulate an entire stock market, much less a dozen or so stock markets around the world.

Manipulators have a hard time tricking an entire market, especially larger markets.  If you get the best value country ETFs, your chances of long term profits improve.

Our Purposeful Investing Course (Pi) teaches an 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of iShare Country Index ETFs managed by Black Rock, Inc.

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.

I am updating my plan to increase my average yield to as much as 4.07%.

My developed market portfolio has been diversified into nine developed markets: Austria, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

iShares Country ETFs make it easy to invest in each of the good value markets.

The average yield of these nine markets combined was 3.27% as of June 2020.  By replacing the three lowest yielding markets, Austria (.64%), Germany (1.83%)  and Japan (2.51%)  with two better yielding neutral markets Australia (4.57%) and Canada (3.54%) the average annual yield on the entire portfolio rises to 4.07%.

4.07% is 154% higher than the 1.6% you can currently earn on AA rated corporate bonds!

The ETFs provide higher income and incredible diversification for safety, plus the highest long term profit potential.

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

There is an iShares country ETF for almost every market.

Here’s how you can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.  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.

You also receive a 100+ 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 of all 46 markets.

This year I will celebrate my 52nd anniversary of global investing and 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 the Pi course.

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.

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%.

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 $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years, plus all new updates over the next year.

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 in the first two months for a full no fuss full refund.

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

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery from the pandemic is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

(1) www.nytimes.com: mystery of high stock market prices

(1) www.cnbc.com/2020/07/07/china-passes-national-security-law-on-hong-kong-but-creates-more-inflows.html

(2) www.forbes.com: trump-says-will-revoke-hong-kong-special-status-reviews-china

How to Catch the Best Performing Markets


Invest in every stock market.

This is not a wise way to invest, but it’s the only way to be sure to always capture the best short term performing stock market.

pixabay

The only way to capture the best performing stock market each month is to invest in them all.

The downside of this tactic is that you also will be invested in the worst performing stock market.

Therefore its best to find a way increase your odds of being invested the best performer when it happens.

My approach and that of an elite group of investors who use our Pi strategy, choose mathematics to narrow our field of opportunity.  We follow the analysis of Keppler Asset Management, who tracks ever stock in 46 stock markets and using important factors such as price to book value, price to earning and average dividend yield, grades stock markets as top value (buy), neutral value (hold) or poor value (sell).

Currently Keppler’s Top Value Model Portfolio holds eight“Buy”-rated markets Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom at equal weights.

This does not always work, nor does it always seem to make sense short term.

For example in the first six months of 2020, the top three performing stock markets were New Zealand (+12.2%), Denmark (+9.0%) and the Netherlands (-1.1%).  They performed best year-to-date and as the performance chart below shows… two of these top performers are sell candidates.

Yet in June, the month when China revoked Hong Kong’s special status as an autonomous entity, the Hong Kong stock market rose +11.0%, the highest performing stock market of the month.

https://www.flickr.com/photos/garyascott/50089310228/in/dateposted-public/

https://www.flickr.com/photos/garyascott/50090120892/in/dateposted-public/

There is always something we do not know, so we never know which markets will rise (or fall) the most in the next month… or quarter… or even in any one year.

However if we look at the 50 year performance of Keppler’s top value strategy we see a dramatic over performance of a top value portfolio… 12.85% per annum versus .87 for an equally weighted global share portfolio.

keppler

The two lessons here is that there is no way to predict equity performance short term, but by mathematically choosing top value stock markets, you gain superior performance long term.

Gary

Add Safety & Get Paid 154% More

Get paid more now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not right now.

This chart from the New York Times article “The Mystery of High Stock Prices” (1) shows that equities pay a higher yield than bonds.

wsj.com

Most Important, Get Paid the Most Now!

Just because US stocks pay more than dollar denominated bonds, does not mean they offer the best income deal.  In fact the chart below shows that US shares pay one of the lousiest yields of the 46 stock markets we monitor around the world.

The US MSCI Index pays a modest 1.91%.  That’s a terrible yield, but better than the 1.6% you can get in AA rated corporate bonds.

Nine solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay 71% higher yield, 3.27% compared to the US yield of 1.91%.

This is why my core stock portfolio consists of a handful of top value share ETFs and this position has hardly changed in five years. 

Let me explain why this strategy adds safety, increases long term appreciation potential and pays almost double short term income right now.

In a moment, I’ll show how to push that yield to 4.07% per annum without adding additional risk.

keppler62020

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only three times, so my trading costs, my fuss, fiddle and time spent have been kept to an absolute minimum.

I have been investing in iShare country ETFs.  Each one invests in the MSCI Index of one of the top (or neutral in the case of Canada and Australia) value markets above.

My strategy protects against stock market volatility and yet has potential for the best gains long term from rising share prices by holding an equally weighted portfolio of the best value based country ETFs.

The Purposeful Investing Course tracks 46 stock markets around the world into determine which markets offer the best value.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Plus Value ETFs are Safer

The people who dominate stock markets include a pack of thieves.  This fact has always been true.  We were recently reminded of this fact when Wirecard AG, one of Europe’s most prestigious companies, listed on Germany’s premier stock-market index, the Dax 30 fooled everyone including its top grade, longtime auditor, Ernst & Young GMBH.

The shares in German fintech company Wirecard AG (symbol WDI fell 63.74% as it filed for insolvency proceedings, after revealing that more than $2 billion in cash missing from its balance sheet was all a fraud.  The company’s market value fell to less than €500 million from almost €13 billion in a week.

Investors have seen this type of rip off again and again, really big scams from Enron to Bernie Madoff and these are just the tip of the iceberg.

Shares in stock markets are manipulated all the time.  Stock markets (in fact almost all types of markets) are led by sharks plain and simple.  Count on this fact.  This is the nature of the beast and the number one goal of many big businesses is to take as much of your money as they can to line their pockets.

In the Wirecard AG example many  thousands of investors have seen their hard work, their thrift, their security and hopes for the future disappear, even though they seemingly did everything right by investing in a blue chip, new era, high tech company.

A study of 92 years of investment returns shows that, despite the fraud and cheating and deceit, stock markets are still a good way to make your money grow… if you invest long term and diversify.

keppler

Our Pi strategy makes it harder for cheaters to grab your wealth because it’s very hard to manipulate an entire stock market, much less a dozen or so stock markets around the world.

Manipulators have a hard time tricking an entire market, especially larger markets.  If you get the best value country ETFs, your chances of long term profits improve.

Our Purposeful Investing Course (Pi) teaches an 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of iShare Country Index ETFs managed by Black Rock, Inc.

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.

I am updating my plan to increase my average yield to as much as 4.07%.

My developed market portfolio has been diversified into nine developed markets: Austria, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

iShares Country ETFs make it easy to invest in each of the good value markets.

The average yield of these nine markets combined was 3.27% as of June 2020.  By replacing the three lowest yielding markets, Austria (.64%), Germany (1.83%)  and Japan (2.51%)  with two better yielding neutral markets Australia (4.57%) and Canada (3.54%) the average annual yield on the entire portfolio rises to 4.07%.

4.07% is 154% higher than the 1.6% you can currently earn on AA rated corporate bonds!

The ETFs provide higher income and incredible diversification for safety, plus the highest long term profit potential.

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

There is an iShares country ETF for almost every market.

Here’s how you can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.  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.

You also receive a 100+ 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 of all 46 markets.

This year I will celebrate my 52nd anniversary of global investing and 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 the Pi course.

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.

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%.

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 $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years, plus all new updates over the next year.

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 in the first two months for a full no fuss full refund.

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

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery from the pandemic is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

(1) www.nytimes.com: mystery of high stock market prices

 

 

4% Per Annum Developed Market Stock Market Income


Learn what’s up with stock market growth, value and dividend yields around the world.

As the US becomes more isolated, we as investors need to become more global.

For decades the US economy was so much larger than any others that everyone was pretty much forced to get along.

stock markets

America’s  dominance has been fading.  The US economy is still estimated to be about a fourth of the world’s total, but the combined economies of China (16% of the global economy), Japan (6%) and Germany (4%) are larger now.  Or the EU economy (22%) is almost as large as the US economy.

In the decades of dominance, the US has been less than competitive compared to the Chinese in developing relationships in Latin America.  Recent activity by the US government has also weakened US, European trade.  Now the European travel ban of U.S. residents creates another economic soft spot, not to mention the potential of stopping foreign students from living in the US.

Now there appears to be a risk that Iran and China will join in a sweeping economic and security partnership that would clear the way for billions of dollars of Chinese investments in energy and other sectors.    The Chinese would invest in Iranian banking, telecommunications, ports, railways and receive Iranian oil over the next 25 years.

China and Iran would also increase military cooperation, that would create new and potentially dangerous flash points in the deteriorating relationship between China and the United States.

As America’s global dominance wanes, the greatest change of long term profits are available to investors when they invest around the world.

A recent Purposeful Investing Course lesson contained an eight page update fro Keppler Asset Management of the best value developed stock markets.  Here are excerpts from  one of the eight pages.

Recent Developments & Outlook

Supported by unprecedented fiscal and monetary stimulus, developed market equities advanced for the third consecutive month in June.

The euro advanced 1.0% to 1.1232 vs. the US dollar in June. Year-to-date, it is up 0.1%.

In June, twenty markets were up and three markets declined.

Hong Kong (+11.0%), New Zealand (+8.1%) and Italy (+6.8%) gained most, while Norway (-2.2%), Israel (-0.9%) and Portugal (-0.4%) had the lowest returns.

Year-to-date, only two markets (Denmark and New Zealand) advanced, while twenty-one markets declined.

New Zealand (+12.2%), Denmark (+9.0%) and the Netherlands (-1.1%) performed best year-to-date, while Austria (-31.1 %), Belgium (-23.9%) and Spain (-22.6%) had the lowest returns.

There is one change in our country ratings this month: Austria is downgraded to “Neutral” From “Buy” due to poor developments of her underlying fundamentals.The Top Value Model Portfolio now holds the eight“Buy”- rated markets Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom at equal weights.

According to our analyses, an equally weighted combination of these markets offers the highest expectation of long-term risk-adjusted performance.

A table in that report shows that the Developed Markets Top Value Model Portfolio is currently selling at 1.21 price-to-book and pays an average annual income of 3.57% compared to the MSCI USA Index selling 3.69 price to book and paying only an average 1.80% annual dividend.

The Top Value Model Portfolio is undervalued by 42% compared to the MSCI World (Standard) Index, by 54% compared to the MSCI USA Index and by a whopping 70% compared to the MSCI World Growth Index.

We can see the benefits of global investing from these excerpts.  Despite Wall Street having its best quarter appreciation in years, it was still not the best performing stock market for the month or for the year to date.

New Zealand (+12.2%), Denmark (+9.0%) and the Netherlands (-1.1%) have performed best year-to-date in 2020.

Humanity’s greatest strength is the ability to cooperate.  Technology forces us to live and cooperate in a global economy.  So as the US withdraws from this greater opportunity, we as investors need to increasingly maintain and expand our global view.

Gary

Add Safety & Get Paid 154% More

Get paid more now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not right now.

This chart from the New York Times article “The Mystery of High Stock Prices” (1) shows that equities pay a higher yield than bonds.

wsj.com

Most Important, Get Paid the Most Now!

Just because US stocks pay more than dollar denominated bonds, does not mean they offer the best income deal.  In fact the chart below shows that US shares pay one of the lousiest yields of the 46 stock markets we monitor around the world.

The US MSCI Index pays a modest 1.91%.  That’s a terrible yield, but better than the 1.6% you can get in AA rated corporate bonds.

Nine solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay 71% higher yield, 3.27% compared to the US yield of 1.91%.

This is why my core stock portfolio consists of a handful of top value share ETFs and this position has hardly changed in five years. 

Let me explain why this strategy adds safety, increases long term appreciation potential and pays almost double short term income right now.

In a moment, I’ll show how to push that yield to 4.07% per annum without adding additional risk.

keppler62020

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only three times, so my trading costs, my fuss, fiddle and time spent have been kept to an absolute minimum.

I have been investing in iShare country ETFs.  Each one invests in the MSCI Index of one of the top (or neutral in the case of Canada and Australia) value markets above.

My strategy protects against stock market volatility and yet has potential for the best gains long term from rising share prices by holding an equally weighted portfolio of the best value based country ETFs.

The Purposeful Investing Course tracks 46 stock markets around the world into determine which markets offer the best value.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Plus Value ETFs are Safer

The people who dominate stock markets include a pack of thieves.  This fact has always been true.  We were recently reminded of this fact when Wirecard AG, one of Europe’s most prestigious companies, listed on Germany’s premier stock-market index, the Dax 30 fooled everyone including its top grade, longtime auditor, Ernst & Young GMBH.

The shares in German fintech company Wirecard AG (symbol WDI fell 63.74% as it filed for insolvency proceedings, after revealing that more than $2 billion in cash missing from its balance sheet was all a fraud.  The company’s market value fell to less than €500 million from almost €13 billion in a week.

Investors have seen this type of rip off again and again, really big scams from Enron to Bernie Madoff and these are just the tip of the iceberg.

Shares in stock markets are manipulated all the time.  Stock markets (in fact almost all types of markets) are led by sharks plain and simple.  Count on this fact.  This is the nature of the beast and the number one goal of many big businesses is to take as much of your money as they can to line their pockets.

In the Wirecard AG example many  thousands of investors have seen their hard work, their thrift, their security and hopes for the future disappear, even though they seemingly did everything right by investing in a blue chip, new era, high tech company.

A study of 92 years of investment returns shows that, despite the fraud and cheating and deceit, stock markets are still a good way to make your money grow… if you invest long term and diversify.

keppler

Our Pi strategy makes it harder for cheaters to grab your wealth because it’s very hard to manipulate an entire stock market, much less a dozen or so stock markets around the world.

Manipulators have a hard time tricking an entire market, especially larger markets.  If you get the best value country ETFs, your chances of long term profits improve.

Our Purposeful Investing Course (Pi) teaches an 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of iShare Country Index ETFs managed by Black Rock, Inc.

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.

I am updating my plan to increase my average yield to as much as 4.07%.

My developed market portfolio has been diversified into nine developed markets: Austria, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

iShares Country ETFs make it easy to invest in each of the good value markets.

The average yield of these nine markets combined was 3.27% as of June 2020.  By replacing the three lowest yielding markets, Austria (.64%), Germany (1.83%)  and Japan (2.51%)  with two better yielding neutral markets Australia (4.57%) and Canada (3.54%) the average annual yield on the entire portfolio rises to 4.07%.

4.07% is 154% higher than the 1.6% you can currently earn on AA rated corporate bonds!

The ETFs provide higher income and incredible diversification for safety, plus the highest long term profit potential.

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

There is an iShares country ETF for almost every market.

Here’s how you can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.  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.

You also receive a 100+ 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 of all 46 markets.

This year I will celebrate my 52nd anniversary of global investing and 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 the Pi course.

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.

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%.

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 $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years, plus all new updates over the next year.

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 in the first two months for a full no fuss full refund.

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

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery from the pandemic is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

(1) www.nytimes.com: mystery of high stock market prices

 

 

Value in Falling Markets


Here’s why it make sense to invest in some stock markets when prices fall.

Last week we sent out Purposeful Investing subscribers the August edition of ENR Asset Management’s “Market Outlook”.

Now is a time, more than normal, to exercise caution in stock markets and maintain one’s value investing disciplines.

Good Value discipline includes the courage to buy when markets fall, as well as sell when markets rise so far they become a poor value.

Volatility have been rising in the US market once again.

In fact we can see from the chart below that, as of last Friday August 8th, the Dow Jones Industrial Index has actually dropped over the past two years, falling from 26,584 to 26,025.

DJI

Stock markets rise and fall.  This is the nature of all markets short term as they are fueled by human emotion.

Long term, all markets are driven by value.

As markets become overheated, emotion continues to push prices up until shares are such a poor value, they correct and prices fall.

Usually the correction is swift.

When overheated markets crash, the fall is due to overpricing.  Poor value is the real reason for a stock market correction.

However some other reason is normally attributed to the crash.  Value is the force but some event that triggers the emotion of fear or uncertainty is cited as the reason.  Value is the entire load.  The trigger is only the final straw that breaks the camel’s back.

This issue of ENR’s Market Outlook shows that the US China trade war could be the trigger now.  This is a battle of the titans… the number one and number two economies on a clash.

The Outlook says: Following a 20% YTD advance heading into August, the S&P 500 Index and the rest of the world suffered big declines following President Trump’s plans for new tariffs on China. The new tariffs, announced on August 1st, would take effect September 1stand cover $300 billion in Chinese goods –including smartphones, apparel, toys and other consumer products. China retaliated this week by letting the yuan or RMB break the psychologically important 7.00 level to the dollar, triggering the biggest single-day global sell-off since last December.

The risk of more damage done to the global economy by escalating trade tensions and tariffs might derail the bull market, as evidenced on August 5th. This week, investors were once again reminded how essential China is to the world economy following its mini devaluation. Despite a relatively strong U.S. economy, the Dow is lower now than it was in January 2018 when President Trump began threatening tariffs –despite strong corporate results in 2018. Business capital spending is declining, and global manufacturing is almost in recession.

Why Buy in Falling Markets?

The US market is a poor value (sell) market in the Keppler Asset Management analysis of 42 stock markets. This makes the US market more vulnerable to a correction, but looking globally Keppler’s projections show that an equally weighted global market index is likely to rise at a compound rate of 6.2% per annum over the next four years.

The chart below shows the entire real-time forecasting history for the KAM Equally Weighted World Index, starting at the end of 1993.

Keppler’s numbers are based on relationships between price and value over the previous fifteen years moving forward in monthly increments and thus adjusting steadily to an ever-changing norm.

keppler

The chart includes two remarkable episodes: The five-year period (1997-2001) during which the KAM Equally Weighted World Index stayed above the upper forecast band, and the period starting in October 2008 when it fell below the lower forecast band, where it stayed through April 2014 (5 years and 7 months).

Since then, the Index (green line) fell slightly below the lower forecast band again twice in the first half of 2016.

In the past, index levels below or slightly above the lower forecast band subsequently turned out to be attractive entry points for long-term investors.

The Keppler World Market Index is at this attractive level now.

Keppler’s projections correspond to a compound annual total return estimate of 6.2 % in local currencies.

Keppler also projects an upper-band and lower-band estimate, 20% above and 20% below the projected return.

The upper band projection is for a compound annual total return of 11.1% while the lower-band estimate  indicates a compound annual total return of 0.4%.

The Keppler chart suggests that this period of volatility offers special buying opportunity in good value markets.

The ENR Market Outlook agrees.

A section of the Outlook entitled “Summer Swoon Raises Spectrum of Bargains” says:

At least once per year, stocks tumble. Though investors don’t like the volatility associated with corrections or steep market declines, they’re part of the investing process. If you invest and hold solid companies for the long haul, then there’s no reason to fear a market sell-off, unless you’re retiring this year and failed to make the appropriate asset allocation changes. For most investors, corrections offer an opportunity to buy bargains. As Warren Buffett likes to point out: ‘Be fearful when others are greedy, and greedy when others are fearful.’

Gary

ENR Asset Management is one of the few SEC registered advisors that can help US investors bank in Austria and Switzerland.  For details send a note with the words OVERSEAS in the subject line to me at gary@garyascott.com

The Only 3 Reasons to Invest

garyheadshot

The stock market has always been the best place of places to protect and increase wealth over the long haul.   Yet it’s also been the worst place to lose money, a lot of it, quickly.

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.

The goal of investing should be to stabilize our security, bring feelings of comfort and elimination of stress!

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

This is why my core stock portfolio consists of 19 shares and this position has hardly changed in three years.  During this time we have been steadily accumulating the same 19 shares and have traded only three times.

A model portfolio that dates back to 1969 has dramatically outperformed almost every stock market in the world.

keppler

A hundred US dollars invested in that portfolio in 1969 is now worth $44833 compared to $100 invested in an equity weighted world index being worth $11,548.

This portfolio is built around a strategy that’s taught in my Purposeful Investing Course (Pi).  I call these shares my Pifolio.

This portfolio more or less matched the S&P 500 until May 2018.  Then a stronger US dollar made the portfolio look like it was falling behind.   This currency illusion creates a special opportunity we’ll view in a moment.

This portfolio above is based on stock price to value analysis built around 91 years of stock market data.

The value analysis is used to create a portfolio of MSCI Country Benchmark Index ETFs that cover  stock markets that are undervalued.  I have combined my 50 years of investing experience with the study of the mathematical market value analysis of Michael Keppler, CEO of Keppler Asset Management.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers use his analysis to manage over $2.5 billion of funds.  However because Keppler’s roots are in Germany (though he lives and operates from New York) and most of his funds registered for the European Union, Americans cannot normally access his data.

I was lucky to have crossed paths with Michael about 25 years ago, so I am one of the few Americans who receive this data and you will not find his information readily available in the US.

In a moment you’ll see how to remedy this fact.

The Pifolio analysis begins with Keppler’s research that continually monitors 46 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.  Then Keppler takes market’s history into account.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael’s 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 good value (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 one stock in that country is an attractive investment.  This eliminates the need for 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 held at the beginning of 2020.   There have been no changes since.

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

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

iShares Country ETFs make it easy to invest in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Germany (symbol EWG) is a Country Index ETF  that tracks the investment results of the MSCI Germany Index. The fund is at all times invested at least 80% of its assets in the securities of its underlying index that primarily consists of all the large-and mid-capitalization companies traded on the Frankfurt Stock Exchange.

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

There is an iShares country ETF for every market in our Pifolio.

This year I celebrated my 52nd anniversary 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.

How you can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (PI).  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 get this course when you enroll in our Purposeful Investing program (Pi) with a triple guarantee.

Triple Guarantee

Enroll in Pi.  Get the 130 page basic training, a 46 stock market value report, access to all the updates I have sent in the past three years, two more reports on investing (described below) and an online 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.

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.This year I celebrated my 51st anniversary 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.

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.

keppler

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.

Save $102 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.

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years,  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 reports 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, 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 $99 a year from now, but you can cancel at any time.

Gary

 

Mexican Vs. Canadian Stocks


Where’s it better to invest, Canada or Mexico?

I was recently speaking with a Pi subscriber and mentioned that I included shares in the iShares Canadian Market ETF (Symbol EWC).

We discussed the benefits of diversifying into country ETF that represent good value stock markets and I mentioned that I included a Canadian ETF in my portfolio even though the Keppler analysis we use to define good value only rates it as a neutral value market.

The subscriber later sent me this note.

Gary, I was mulling what you’d mentioned about adding Canada to your portfolio. What about the Mexico ETF (EWW)? Is there a reason not to include neighboring countries?

My reply was that I have never thought through the geographic dimensions of a market’s value, but being next to the USA might add some benefits to a market.  Mexico might especially be depressed right now due threats of tariffs on its products shipped to the USA.

However the philosophy at Keppler Asset management is that markets take economic and political factors into account so they are reflected in the numerical fundamental value factors such as price to book, price earnings and dividend yield.

Keppler’s analysis, ranks Mexico as a sell rated (poor value) market. Canada is a neutral ranked market.

keppler

Comparing price to book, Mexico is selling at 2.01 times books compared to Canada’s 1.80.

Mexico’s 15.8 PE ratio is lower than Canada’s 17.5 PE but Mexico’s 2.81% average dividend does not compare well with and Canadian 3.21% average dividend.

keppler

From a performance point of view, the Canadian ETF has far outperformed Mexico in the past five years.

Here’s the Canadian ETF’s performance.

tradestops.com

Here’s the Mexican ETF’s performance.

tradestops.com

Of course past performance is no indicator of the future, but both of these ETFs are trending up at this time.

Value oriented investors (me included) would still leave Mexico out of our portfolio, but this could be a good time to add the Canadian ETF.

Gary

The Only 3 Reasons to Invest

garyheadshot

The stock market has always been the best place of places to protect and increase wealth over the long haul.   Yet it’s also been the worst place to lose money, a lot of it, quickly.

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.

The goal of investing should be to stabilize our security, bring feelings of comfort and elimination of stress!

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

This is why my core stock portfolio consists of 19 shares and this position has hardly changed in three years.  During this time we have been steadily accumulating the same 19 shares and have traded only three times.

A model portfolio that dates back to 1969 has dramatically outperformed almost every stock market in the world.

keppler

A hundred US dollars invested in that portfolio in 1969 is now worth $44833 compared to $100 invested in an equity weighted world index being worth $11,548.

This portfolio is built around a strategy that’s taught in my Purposeful Investing Course (Pi).  I call these shares my Pifolio.

This portfolio more or less matched the S&P 500 until May 2018.  Then a stronger US dollar made the portfolio look like it was falling behind.   This currency illusion creates a special opportunity we’ll view in a moment.

This portfolio above is based on stock price to value analysis built around 91 years of stock market data.

The value analysis is used to create a portfolio of MSCI Country Benchmark Index ETFs that cover  stock markets that are undervalued.  I have combined my 50 years of investing experience with the study of the mathematical market value analysis of Michael Keppler, CEO of Keppler Asset Management.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers use his analysis to manage over $2.5 billion of funds.  However because Keppler’s roots are in Germany (though he lives and operates from New York) and most of his funds registered for the European Union, Americans cannot normally access his data.

I was lucky to have crossed paths with Michael about 25 years ago, so I am one of the few Americans who receive this data and you will not find his information readily available in the US.

In a moment you’ll see how to remedy this fact.

The Pifolio analysis begins with Keppler’s research that continually monitors 46 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.  Then Keppler takes market’s history into account.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael’s 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 good value (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 one stock in that country is an attractive investment.  This eliminates the need for 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 held at the beginning of 2020.   There have been no changes since.

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

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

iShares Country ETFs make it easy to invest in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Germany (symbol EWG) is a Country Index ETF  that tracks the investment results of the MSCI Germany Index. The fund is at all times invested at least 80% of its assets in the securities of its underlying index that primarily consists of all the large-and mid-capitalization companies traded on the Frankfurt Stock Exchange.

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

There is an iShares country ETF for every market in our Pifolio.

This year I celebrated my 52nd anniversary 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.

How you can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (PI).  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 get this course when you enroll in our Purposeful Investing program (Pi) with a triple guarantee.

Triple Guarantee

Enroll in Pi.  Get the 130 page basic training, a 46 stock market value report, access to all the updates I have sent in the past three years, two more reports on investing (described below) and an online 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.

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.This year I celebrated my 51st anniversary 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.

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.

keppler

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.

Save $102 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.

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years,  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 reports 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, 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 $99 a year from now, but you can cancel at any time.

Gary

Value Reflection


Here is why we need to use mathematically based value information, rather than economic news, to make investment decisions.

Come back with me in time.

Take advantage of my 50 years investing experience.

Gain lessons learned from my decisions.

And sometimes stupidity.

I was a gold and silver speculator in the 1970s and 1980s.

I made a lot of money.

Then I gave most of it back…

Stupid.

My profits came when gold and silver spiked in the late 1970s.

“This will go on forever”, I thought.

“Instability between the USA and the Soviet Union will push up the price of  gold.”

I thought.

Secretary Brezhnev died November, 10 1982.  A power struggle took place in the Kremlin.  Yuri Andropov became the new General Secretary.  US−Soviet relations deteriorated rapidly.   In March 1983, President Ronald Reagan dubbed the Soviet Union an “evil empire”.   September 1, 1983 the Soviets shot down of Korean Air Lines Flight 007  with 269 people including a sitting US congressman, Larry McDonald.

“Gold is really going to sky rocket now!”

I thought.

I bought!

This historical chart of gold’s price (that period is lined in red) shows how that went well.

gold

Gold’s price crashed.

I lost.

Let’s apply this lesson to yesterday’s wall Street Journal article “Gold Prices Fall to Seven-Week Low as Dollar Strengthens” (1)

The article says:  Gold prices fell to a nearly two-month low Monday, weighed down by a stronger dollar.

Gold for December delivery edged down 0.7% to $1,275.80 a troy ounce on the Comex division of the New York Mercantile Exchange—the most actively traded gold contract’s lowest close since Aug. 8. Prices have fallen in four of the last five sessions and in three consecutive weeks since hitting their highest level in more than a year, with concerns about interest-rate increases and a stronger dollar hurting the precious metal.

Investors have also largely shaken off recent geopolitical risks, weakening demand for gold and other haven assets that typically rise during times of political turbulence. Gold prices fell Monday even after voters in Catalonia backed independence from Spain in a referendum that was boycotted by opponents and marred by violence, and after President Donald Trump rejected dialogue with North Korea.

This could suggest that its time to sell gold.

My math based value assessment suggest the opposite.

It’s closer to the time to buy gold.

There are seven layers of tactics in the value based Purposeful investing (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.

An “ideal condition” is a rare distortion of an economic fundamental that history has shown “almost always” reverses itself.  

The words “almost always” indicates that there is always risk, but our in depth analysis of gold’s price at Pi shows that based on inflation anytime gold drops below $1,225 the price is distorted, is a good value and is time to buy.

In other words we are at a price where its almost time to begin accumulating gold.

More of  yesterday’s Wall Street Journal news “U.S. Stocks Close at Records” (2)  suggest that US shares are really hot.  The article says: Dow industrials, S&P 500, Nasdaq Composite and Russell 2000 close at records together for the first time since July.  Major U.S. stock indexes advance.  Euro falls after Catalan vote. Spanish bonds, stocks under pressure.  U.S. stocks clinched new records Monday, as fresh economic data bolstered investors’ beliefs in a resilient economy.

Over past decades I have experienced how readers react when markets continually jump from high point to high, so I am issuing the following warning for the third time in a week.

No one knows when the super heated US stock market will begin its next bear trend.

What we do know is the value of the US market compared to its history and to other stock markets around the world.

The numbers below from Keppler Asset Management, another source of data we follow at Pi,  shows that the price-to-book of the MSCI US Share Index at 3.13 price-to-book is still well below the super inflated price to book of 4.23 in December 1999.

keppler

A bear will again descend on Wall Street.

The autumn and winter months ahead are a likely time.

Yet we cannot be sure.

We can still see profits and growth in US shares and we will… until we won’t.

All stock markets have risk and volatility, but that if you invest in the top ten good value markets, that have a price-to-book of just 1.43,  this is a much better deal than paying 3.13 price to book  for US shares that are their record high.

Take extra caution in your equity investments now.  The volatility quotient of the DJI is about 10%.

The trend is bullish so the trend won’t break until the DJI drops below 20,000.

That could happen in minutes tomorrow… or any day.

Remain alert.  Short-term trading algorithms can cause market trends to shift at astounding speed.

Prepare now what you will do if the markets panic.

Create a plan based on math based good value economic data.

Include watching the price of gold.

When the crash comes, stick to you plan.

Do not panic.

Turn on the auto pilot and normally add to your position.

Do not let feelings influence you too much.  Use logic and math instead.

Gary

The Only 3 Reasons to Invest

garyheadshot

The stock market has always been the best place of places to protect and increase wealth over the long haul.   Yet it’s also been the worst place to lose money, a lot of it, quickly.

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.

The goal of investing should be to stabilize our security, bring feelings of comfort and elimination of stress!

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

This is why my core stock portfolio consists of 19 shares and this position has hardly changed in three years.  During this time we have been steadily accumulating the same 19 shares and have traded only three times.

A model portfolio that dates back to 1969 has dramatically outperformed almost every stock market in the world.

keppler

A hundred US dollars invested in that portfolio in 1969 is now worth $44833 compared to $100 invested in an equity weighted world index being worth $11,548.

This portfolio is built around a strategy that’s taught in my Purposeful Investing Course (Pi).  I call these shares my Pifolio.

This portfolio more or less matched the S&P 500 until May 2018.  Then a stronger US dollar made the portfolio look like it was falling behind.   This currency illusion creates a special opportunity we’ll view in a moment.

This portfolio above is based on stock price to value analysis built around 91 years of stock market data.

The value analysis is used to create a portfolio of MSCI Country Benchmark Index ETFs that cover  stock markets that are undervalued.  I have combined my 50 years of investing experience with the study of the mathematical market value analysis of Michael Keppler, CEO of Keppler Asset Management.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers use his analysis to manage over $2.5 billion of funds.  However because Keppler’s roots are in Germany (though he lives and operates from New York) and most of his funds registered for the European Union, Americans cannot normally access his data.

I was lucky to have crossed paths with Michael about 25 years ago, so I am one of the few Americans who receive this data and you will not find his information readily available in the US.

In a moment you’ll see how to remedy this fact.

The Pifolio analysis begins with Keppler’s research that continually monitors 46 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.  Then Keppler takes market’s history into account.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael’s 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 good value (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 one stock in that country is an attractive investment.  This eliminates the need for 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 held at the beginning of 2020.   There have been no changes since.

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

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

iShares Country ETFs make it easy to invest in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Germany (symbol EWG) is a Country Index ETF  that tracks the investment results of the MSCI Germany Index. The fund is at all times invested at least 80% of its assets in the securities of its underlying index that primarily consists of all the large-and mid-capitalization companies traded on the Frankfurt Stock Exchange.

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

There is an iShares country ETF for every market in our Pifolio.

This year I celebrated my 52nd anniversary 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.

How you can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (PI).  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 get this course when you enroll in our Purposeful Investing program (Pi) with a triple guarantee.

Triple Guarantee

Enroll in Pi.  Get the 130 page basic training, a 46 stock market value report, access to all the updates I have sent in the past three years, two more reports on investing (described below) and an online 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.

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.This year I celebrated my 51st anniversary 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.

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.

keppler

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.

Save $102 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.

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years,  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 reports 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, 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 $99 a year from now, but you can cancel at any time.

Gary

(1) www.wsj.com: gold prices edge lower

(2) www.wsj.com: stock markets off to a strong start

 

Gary Scott – International Investment Value Q&A


Gary Scott – International Investment Value Q&A

Saturday is the day we can express opinions and answer questions to enjoy the wisdom of the masses.  This issue focuses on international investment value.

Each day when I complete my message, I ask myself, “Is there something here that is interesting… and useful that can help make our readers’ lives better?”

We live in a universe of unlimited abundance and wisdom.  Yet that infinite wisdom also uses time to make everything go.

Other times the masses can be impossible and… crazy even in the short term.

In fact short term it is usually best to avoid the masses. See why at “avoid the masses”

A number of readers sent me a question in response to our article “Manta to Bahia Progress” that mentioned a 38 acre beach sit for sale at $15,000. that I wrote about in 2001.

Reader Question: Gary, Thanks for your daily missives, very educational.  The 38 acres you mention, could you please provide me with more info?  I would like to locate this on Google maps. Thank you for expanding on this info, Patrick.

My reply:  Thanks for getting in touch.  Please reread as that quote as it was from an article I wrote in 2001.  In the article I underlined 2001 as I worried readers would miss that fact that the road south is now over a decade old.

However I phrased this badly because a number of readers missed the point and requested the same data you have.

Regretfully you are ten years too late when it comes to looking south but I reviewed that old article to point out what happened back a decade as the new road north can have same impact and I’ll get to toot my horn about this ten years from now (or maybe sooner).

We’ll keep looking for contrast distortions and trends that might help you spot potential now for profits in the years ahead and look forward to sharing 2011 with you. 

Reader’s comment to my message explaining why I paid off my US dollar leverage because I am concerned about currency turmoil in Europe and the US in 2011.  Dear Gary,  I would like to make you aware if you are not to China’s commitment  to protect the Euro. This is new news and they are talking about loaning five billion dollars to Portugal. They have already offered some assistance to Greece.  I do not see the Euro exchange rate dropping very much with that backing. Best regards to you and Merri.

My Reply: Thanks. I hope you are correct. Instability in Europe would not be a good scenario.  However such news does not encourage me. The fact that Europe and China are publishing the fact that China is making these loans probably means that both Europe and China are worried.

Anytime any politician tells me not to worry… I start doing so… hence my added caution.

There is another reason to have concern over dollar euro turmoil.

A recent Economist article entitled “Squaring the triangle” points out the impact that low bond rates have on currencies and the stock market.  Here are excerpts:

Photo from the Economist article “Squaring the Triangle”.

THROUGHOUT 2010 financial markets have reflected a strange confluence of views. Government-bond yields have been low (outside peripheral Europe), indicating that investors are expecting low inflation and slow economic growth. But gold, an inflation hedge, has risen steadily, while American equities, a play on growth, have performed well.

This threefold combination cannot last for ever. That it has persisted for so long is probably down to the Federal Reserve’s quantitative easing (QE), which gave comfort to bulls in all three asset classes. The gold bugs saw QE as inflationary, equity enthusiasts saw the tactic as boosting growth and the bond markets had the comfort that the Fed would be the “buyer of last resort” for Treasuries.

Oddly enough, it was the launch of the Fed’s second round of QE in November that seems to have broken the logjam. The ten-year Treasury bond yield has increased from 2.56% to 3.53% since then, with an extra spurt after the announcement of an agreement to extend America’s Bush-era tax cuts, supplemented by a cut in the payroll tax.

Yet in the long run creating money to prop up asset prices is not a sustainable tactic.

Higher bond yields have other consequences that might not be quite so welcome. Mortgage rates in America have risen, casting a further pall over the subdued housing market. Influenced by the Treasury market, yields in Britain and Germany have risen by a third to a half of a percentage point over the past month, even though both countries are making strenuous efforts to keep their budget deficits under control. Higher yields in Germany, which sets the benchmark for other euro-zone countries, put pressure on peripheral borrowers.

Stockmarket investors should also think carefully before they celebrate too wildly over rising bond yields. After all, bulls were previously arguing that low yields were good news for equities, as they encouraged investors to move out of fixed-income assets in search of higher returns. On the best long-term measure, the cyclically adjusted price-earnings ratio, Wall Street looks overvalued on a multiple of 21.9, some 33% above the historic average. That already seems to price in a significant rebound in corporate profits. (Bolds and underline are mine).

The fundamental problem remains. In a “normal” American economy, with 2% inflation and 3% real GDP growth, government-bond yields ought to be around 5%. But yields at that level would be too high for the health of the housing market, the stockmarket and for other governments worldwide. The markets are no closer to resolving that dilemma than they were at the start of 2010.

Here is why I believe this creates a concern.  Governments have done a lot to stimulate the global economy.  This has created debt and soverign debt instability as it pushed up the stock market, but did not really get the industrialized economies growing.  This leads to inflation and higher interest rates which could slow economies again and cause currency turmoil and stock markets to fall.

We review how to invest in these condtions at our February Investing and Business Semainrs in Mt Dora.  See details below.

Reader’s comments: Ecuador real estate is a bubble in the making. Subject: Manta to Bahia Progress

My reply. The bubble may already be made in many parts of Ecuador. This is great for those of us who began buying 15 years ago but it’s also why we have been urging readers for some time to take advantage of unknown areas and why we warn DO NOT TRY to FLIP real estate in Ecuador.

See my previous articles on why you should not try to flip real estate anywhere at http://www.garyascott.com/2010/12/15/11138.html
and http://www.ecuadorliving.com/2010/12/28/investing-in-ecuador-real-estate.html

Read the messages above to see the importance of always seeking value. This is why we always warn: “Merri and I recommend that you Visit First. Then Rent before you buy. Make sure that Ecuador is the place you love and enjoy.  Then buy when you are sure.”

Some places and investments grow too expensive.  Others become really cheap.  Ecuador has become much more expensive than when Merri and I first started living and investing there 15 years ago.   However there is still good value for those who take the time to learn the real estate market and search for value.

See http://www.garyascott.com/2010/12/01/11066.html

After I announced that all visa applications for Ecuador many readers sent comments.

Reader’s Comments: Sounds like it is more of an internal government problem, rather than an  immigration problem. This might give the government a chance to make the process more straight forward, why wouldn’t Ecuador want retires money and knowledge, those that really want to be apart of the local communities and contribute, not those just trying to make a fast buck. I still plan to move to Cuenca the end of this month, I am just finalizing the details now. Thank you for the information, I really appreciate the information you make available, it really helps to gain a true picture of the country from someone that cares.

My friend from Florida moved to Cuenca three weeks ago and has her two children enrolled in school and is already making friends with the locals, not too many single ladies are capable of that on their own, and she and her children are just now learning the language. Now there is a story very few would have to tell. She had no contacts there before moving and only visited Ecuador briefly before making the decision to move there permanently.

Another reader wrote: I have had lunch with the members of the referred to immigration office before and after the removal of the Director for corruption. He was not well liked by the staff and they are witness against him.

My comment.  What makes Ecuador a great place are the people. This is why a woman with two children could move there alone and gain so much support, not because of a government plan.  The best scenario in my opinion would have been that the government never even became aware of the expats coming in.  Let them do as Ecuador’s constitution is designed…. treat all equally in the eyes of the law.  Ecuador does not need special benefits to attract expats and whatever a government does… they’ll most likely get it wrong.  My belief is the less government the better.

However Pandora is probably out of the box on this issue so remember the key to success is adaptability!

Gary

The most powerful protection in life is to be able to earn income globally… not depend on governments.  Learn how to earn below.