Tag Archive | "Value investing"

Asian Stock Breakaway


Look to Asia for profit.

Asian stocks are outperforming US stocks by the biggest margin in ten years.

That’s relevant because the S&P 500 Index has blown away every region over the past decade with a 13.74% annualized return compared to just 1.01% per annum for the MSCI EAFE  (Europe, Asia, Far East) Index (ex.USA), 2.35% annually for MSCI Pacific and a lowly 0.31% per year for MSCI Europe Index.

pixabay.com

Asian shares are rising

It worth noting that three of the eight Keppler Top Value Developed Markets that we track in  our Purposeful Investing (Pi) Course are in Asia; Hong Kong, Singapore and Japan.

keppler

Four of the ten Keppler Top Value Emerging Markets are also in Asia; China, Korea, Malaysia and Taiwan.

keppler

Due to the size of China’s economy, I treat China as a developed market in my 70% (developed) 30% (emerging) market weighting and that over weighting has added a boost in my portfolio.

When planning your global diversification of assets abroad for the next four years, first and foremost think value…  then add emphasis to finding good value investments in Asia.

Gary

Add Safety, Profit & Get Paid Double

The next four years will be a period of high overseas stock growth.

The chart below shows the last 26 years of real-time forecasting by the global equity analyst we track to make our portfolio decisions.

The analyst is Keppler Asset Management and the index they create The KAM Equally Weighted World Index is 15.4% below the value that the analyst forecast four years ago in September 2016.

The chart shows how in the past, two and a half decades there have been four opportunities (red Xs) when the entry levels in global markets were below or around the lower valuation band.  In the previous three low points like this, there has always been the highest growth and positive returns three to five years later.

keppler

 

So it’s good to know that if you invest in global stock markets overall, now, you’ll make capital gains over the next four or five years.

More importantly you get paid more income now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not in 2020.

This year equities have been paying a higher yield than bonds.

As of November 2020, according to Ycharts.com, (1)  AA bond yields are at 1.59%.

ycharts.com

 

The US MSCI Index pays a modest 1.68% as of November 2020 .  That’s a terrible yield, but better than the 1.59% you can get in AA rated corporate bonds.

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

Eight solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay more than double the average US yield.  They pay  3.57% compared to the US yield of 1.68%.

keppler

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.

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only five 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 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 uses Keppler analytics to track 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 Purposeful Investing Course (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.

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.

My developed market portfolio has been diversified into eight developed markets: 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 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 most stock markets around the world.

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 higher 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) Ycharts.com corporate bond yields

 

How Election Results Impact Stock Markets


What will the election results mean to the stock market?

If history is an accurate guide, “Not Much” is the answer to this question.

Last week we sent our Purposeful Investing (Pi) course subscribers, the November 2020 ENR Asset Management Market Outlook (1).   One key feature was some positive thoughts relating to the outcome of US election.

This issue of the Outlook says:   For investors worried about how the stock market will fare in the event of a divided government, history shows equities tend to rise regardless of which party controls government.

From 1929 through 2019, one party controlled both chambers of Congress and the presidency in 45 of those years.

The S&P 500 Index on average rose 7.45% during those years, according to Dow Jones Market Data.

The index was up 30 times and down 15 times.

In the other 46 years when there was a split government, the index climbed 7.26% on average, rising 29 times, falling 16 times and remaining unchanged once;

According to Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, stocks have performed better under Democrats.

Since 1900, $10,000 invested in the Dow Jones Industrial Average only when Republicans were President would have grown to about $100,000 (4% annualized). The same $10,000 would have grown to nearly $430,000 if it were invested only when Democrats were President (6.1% annualized return).

The Outlook also upgraded Asia and emerging markets to BUY in November because Asian stocks are outperforming the United States by the most in ten years, according to Bloomberg and Rosenberg Research.

pixabay.com

Asia, where markets may be rising more

With the US stock markets exhibiting extreme volatility, we need international alternatives to balance our portfolios.

Once a quarter we send out Purposeful investing subscribers (Pi) a 52 page report prepared by Keppler Asset Management that looks at the value and performance of every emerging stock market in the world.  Here are short excerpts of the emerging markets report for the autumn of 2020.

 The report shows the values of the ten best value emerging markets.

keppler

We can compare these values to the high cost of the US and other overpriced markets.

keppler

Investing in a spread of the top value emerging markets at a price-to-book of 1.31 paid an average dividend of 3.78% compared to 1.63% from US markets.   Pus the price-to-book for  US shares is 3.96 more that three times higher than the average price-to-book for the top value emerging markets.

Plus investors who ignored overseas markets lost out!

Through September 2020, the US market was up  6.8%. The Taiwan market was up +14%, India +12.3.1%, China +12.0%,

After suffering one of their worst quarterly returns for the last thirty years in the first three months of this year, emerging markets equities recovered strongly.

Following double-digit returns in the second quarter, the MSCI Emerging Markets Total Return Index (ND) climbed another  9.6% in US dollars.

Year-to-date, however, the MSCI EM TR Index is, in US dollars down 1.2% in the first nine months.

Among the three regional indices, Asia advanced 10.6%, while Europe, Middle East and Africa (EMEA) gained 2.5% and Latin America was down 0.9%.

Year-to-date, Asia fared best, gaining 8.0% thanks to the good performance of China, while EMEA fell 10.5% and Latin America declined 17.4%.

Thirteen markets advanced last quarter, and also thirteen markets were down. Taiwan (+14%), India (+12.3.1%) and China (+12.0%) had the highest total returns last quarter, while Thailand (-11.9%), Hungary (-10.6%) and the Czech Republic (-8.6%) performed worst.

Year-to-date, however, only three out of the twenty-six markets included in the MSCI EM Index recorded a positive return.

The Top Value Model Portfolio gained 3.0% in US dollars last quarter.

There were no changes in Keppler’s country ratings last quarter. The Top Value Model Portfolio continues to hold ten markets—Brazil, Chile, China, Colombia, the Czech Republic, Korea, Malaysia, Mexico, Russia and Taiwan—at equal weights.

According to Keppler’s analyses, an equally weighted combination of these most attractively valued markets offers the highest expectation of long-term risk-adjusted performance.The table below shows how the Emerging Markets Top Value Model Portfolio compares to selected indices as of the end of September, based on important variables (current numbers for book value, 12-months trailing numbers for the other variables—no forecasts).

keppler

According to Keppler’s analyses, the asset class Emerging Markets Equities is now undervalued by 24% compared with the MSCI World Index of the developed markets.

Moreover, the Emerging Markets Top Value Model Portfolio is undervalued by 28% compared to the MSCI Emerging Markets (Standard) Index, by 45% versus the MSCI World Index and by a whopping 61% compared to the MSCI EM Growth Index.

Therefore, the outlook for superior performance of emerging markets equities in general and the Emerging Markets Top Value Model Portfolio in particular, over the next three to five years, remains very favorable.

Note: Due to liquidity issues and geopolitical risks, Keppler assigns lower than equal weights to smaller markets in the portfolios they advise.

We live in a global economy and to keep our investments balanced with the world, we should keep a continual watch on value in all stock markets and look for international as well as local equity opportunity.

Gary

Add Safety, Profit & Get Paid Double

The next four years will be a period of high overseas stock growth.

The chart below shows the last 26 years of real-time forecasting by the global equity analyst we track to make our portfolio decisions.

The analyst is Keppler Asset Management and the index they create The KAM Equally Weighted World Index is 15.4% below the value that the analyst forecast four years ago in September 2016.

The chart shows how in the past, two and a half decades there have been four opportunities (red Xs) when the entry levels in global markets were below or around the lower valuation band.  In the previous three low points like this, there has always been the highest growth and positive returns three to five years later.

keppler

 

So it’s good to know that if you invest in global stock markets overall, now, you’ll make capital gains over the next four or five years.

More importantly you get paid more income now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not in 2020.

This year equities have been paying a higher yield than bonds.

As of November 2020, according to Ycharts.com, (1)  AA bond yields are at 1.59%.

ycharts.com

 

The US MSCI Index pays a modest 1.68% as of November 2020 .  That’s a terrible yield, but better than the 1.59% you can get in AA rated corporate bonds.

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

Eight solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay more than double the average US yield.  They pay  3.57% compared to the US yield of 1.68%.

keppler

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.

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only five 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 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 uses Keppler analytics to track 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 Purposeful Investing Course (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.

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.

My developed market portfolio has been diversified into eight developed markets: 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 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 most stock markets around the world.

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 higher 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) Ycharts.com corporate bond yields

Developed Market Update


With the US stock markets being so wobbly, we need alternative investments around the world.

Once a quarter we send out Purposeful Investing subscribers (Pi) a 79 page report prepared by Keppler Asset Management that looks at the value and performance of every developed stock market in the world.  Here’s a chart that’s in this quarter’s for the autumn of 2020.

keppler

The good value markets selling at an average price-to-book of 1.24 are quite a bargain compared to the US market selling at an average price of book of 3.96.

Plus investors who ignored overseas markets, last quarter, lost out!  Through September 2020, the US market was up 6.8%. Th Danish market was up +20.2%.  New Zealand was up +8.1%.  In addition while the US market paid an average  1.63% dividend, the Top Value markets paid an average 3.44% dividend.

In connection with the Coronavirus outbreak in the first three months 2020, developed markets equities suffered their worst quarterly decline of the last fifty years. Then, in the second quarter they recovered strongly with total returns in the high teens.

In the third quarter, the cap-weighted MSCI World Total Return Index (ND) advanced 7.9% in US dollars.

Twelve markets advanced last quarter and eleven markets declined.

Denmark (+10.3%), Sweden (+10.1%)and Ireland (+9.7%) were up most, while Austria (-8.8%), Spain (-7.8 %) and Portugal (-7.5%) were the biggest losers.

Despite the strong rally in the second and third quarters, seventeen markets were still down and only six markets advanced year-to-date.

Denmark (+20.2%), New Zealand (+8.1%) and the U.S. (+6.8%) performed best year-to-date, while Austria (-37.2%), Spain (-28.6%) and Belgium (-25.6%) came in last.

There were no changes in the best value developed market ratings last quarter. 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 the analyses of Keppler Asset management, an equally weighted combination of these markets offers the highest expectation of long-term risk-adjusted performance. The chart below shows the entire real-time forecasting history for the KAM Equally Weighted World Index, starting at the end of 1993.

keppler

The current level is 5.8% above the lower forecast band, which Keppler forecast four years ago. In the past, entry levels below or around the lower valuation band have always yielded positive returns three to five years later.

Keppler’s implicit three-to-five-year projection places the KAM Equally Weighted World Index rising for a compound annual total return estimate of 6.1 % in local currencies.

The upper-band estimate implies a compound annual total return of 11.1%, while the lower-band estimate indicates a compound annual total return of only 0.4%.

keppler

While the average developed market—as measured by the KAM Equally Weighted World Index—is now under-valued by 31% vs. the cap-weighted MSCI World Index, based on traditional valuation measures, the Top Value Markets are now undervalued by 41% compared to the MSCI World (Standard) Index, by 53% compared to the MSCI USA Index and by a whopping 68% compared to the MSCI World Growth Index.

We live in a global economy and to keep our investments balanced with the world, we should keep a continual watch on global value and international opportunity.

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

The Value Best Stock Market in the World


What’s the best value stock market in October 2020?

In this era of divisive media and fake news, it’s increasingly hard to know who and what to trust.

This is why, when it comes to choosing equities, I increasingly rely on math rather than stories.

Individual investors tend to think in terms of stories and act upon emotional responses to these tales.  This makes them fodder for institutional investors who select equities based on math.  The big boys react to changes in numbers not conjecture and opinion so they slaughter those who invest based on the rumor mill.   Thus the rich get richer.

If I were to speculate in any stock right now, I would use math to choose an ETF that covers the best value stock market in the world, based on price-to-book.

Most often the least expensive market is an emerging market, but  not right now.

The chart below shows the 26 emerging markets monitored by Keppler Asst Management.

The best value emerging market based on price-to-book is Pakistan with a 0.81 price-to-book.

kepler

However, the Pakistani exchange has volatility that is sky high: Last year Bloomberg called it the “world’s worst stock market,” noting that values had halved in 2019.

The chart from www.finance.yahoo.com below shows the performance of the Global X MSCI Pakistan ETF (PAK) that  provides investors access to the largest, most liquid companies in Pakistan.

pakistan

Poor performing markets can bounce back.  This ETF that invests entirely in Pakistan equities is up 38.40% in the last six months.

Yet I would limit investments in Pakistan shares.

First there is the political risk.  Just three months ago (June 29), four gunmen stormed the Pakistan stock Exchange shooting bullets and grenades.  Eight people died.

Attacks on Wall Street or any stock exchange are not unthinkable of course.  Even 100 years ago 143 died when Wall Street was bombed.  The FBI has broken up recent plots to bomb the exchange as well.

Still Pakistan’s political situation might be a little less stable than many developed countries.

The Pakistan market is also very volatile due to the lack of an active investor base and liquidity in the market.

There is a developed market that has an even better price-to-book at this time.

Take a look at the developed value markets tracked by Keppler and you’ll see that Austria is the best value stock market with a price-to-book of 0.71.

keppler

keppler

The iShares MSCI Austria ETF seeks to track the investment results of a broad-based index composed of Austrian equities.

About iShares MSCI Austria ETF

The investment seeks to track the investment results of the MSCI Austria IMI 25/50 Index. The fund generally invests at least 90% of its assets in the securities of its underlying index and in depositary receipts representing securities in its underlying index. The index is a free float-adjusted market capitalization-weighted index with a capping methodology applied to issuer weights so that no single issuer exceeds 25% of the underlying index weight, and all issuers with a weight above 5% do not cumulatively exceed 50% of the underlying index weight. The fund is non-diversified.

austria

With the plunge of 37% in late 2019, the Austrian market could offer some extra profit in a recovery.

This would be a speculation.  Austria is not a top value market based on Keppler Asset management analyses.

The top value markets are Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom at equal weights.

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

My strategy is based on investing in ETFs that invest in good value markets, based on their price-to-book,  P/E ratio and average dividend.

By trusting numbers we can create a plan based on math based, good value economic data, instead of guesswork.

Every type of analysis shows that by keeping costs down and investing in good value equities for the long term, provides maximum safety and profit in stock markets.

Yet Boomers can’t always have a long term perspective.

Thinking long term and keeping costs down are two of the vital components of a calm investing strategy so I have a special offer for Boomers on my birthday.

Enroll in our Purposeful Investing Course (Pi) at any price you feel you can afford

Stock market have always been the best place 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 16 shares and this position has hardly changed in three years.  During this time we have been steadily accumulating the same 16 shares and have traded only three times.

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

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.  The fact you don’t have to seek out specific shares eliminates the need for hours of research aimed at picking specific shares.  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 from 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 right now in October 2020.

70% is diversified into Keppler’s good value (BUY rated) developed markets: 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, China, 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 German (symbol EWG) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI German Index which is composed mainly of large cap and small cap German stocks.

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.

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.

Enroll in Pi for any amount you choose.  You get the 130 page basic training, plus you receive a 120 page 46 stock market value report, and access to all the updates I have sent in the past three years.

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.

You also begin receiving regular emailed Pifiolio updates, usually 6 to 8 reports a month. 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 have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

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.

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

stock-Charts

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

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

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

Use time not timing.

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%.

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

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

In this special birthday offer you can subscribe to the first year of The Personal investing Course (Pi) for any amount you feel you can afford.  The annual fee is normally $299, but Boomers can pay whatever they choose for the first year.

ecuador-seminar

Gary Scott

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 any amount you choose.  This is the last week of  this special offer.

Buy Purposeful Investing

Your subscription will be charged the annual renewal fee of $99 a year from now, but you can cancel at any time.

Gary

Civil War II – The Cost of Trading Down


Over the last 52 years I have been involved in global economic activity, mostly while residing either on US or British soil.

During that time I  have never seen quite as much polarity in the USA or in the UK.

It’s like Civil War II.

Why?

boris johnson

Boris Johnson

Donald trump

Donald Trump

Could it be hairdos?

The hair is probably not the point nor should it be.

The fact that mainstream media focuses on the hair and looks and other irrelevant information is more the issue.

In both the US and Britain, huge tensions are being based around emotions created by unimportant information rather than on issues.  This makes Winston Churchill’s quote about voters all too correct.

Churchill said:  “The best argument against democracy is a five-minute conversation with the average voter.”

Sadly politcans think this is true and try to lead through distorted stories.

Author Yuval Noah Harari, in his missive 21 Lessons for the 21st Century, clarified an important point:  “Humans think in stories rather than in facts, numbers, or equations, and the simpler the story, the better.”

This creates a problem.  Politicians think that voters have to be told a simple story, so they dumb down important, complex messages so they don’t get across enough of the tale.

I saw a prime example of this in NPR’s coverage of the recent Supreme Court hearings when one speaker spoke about the issue of allowing felons to vote.  He started off talking about how Democrats wanted to let murders and rapists vote.  That theme remained throughout the speech.  There was no mention of the fact that a majority of felons are not murders or rapists and huge numbers are solid citizens caught up in drug problems.

I felt insulted that anyone would think I would buy into such a distorted story!

I believe that one root of these tensions both in the US and UK is “Trading Down”.   Brexit and Trump are popular with the disenfranchised middle class who have seen the quality of their lifestyles erode as politicians and big businesses work together to make a few people, who prey on the middle class, rich.

One of many examples why the middle class should be angry is zero interest rates on her investments and savings.

Banks like JP Morgan Chase, pay nothing on middle class savings.  But they still charge really high interest on credit cards.  The middle class lifestyle is being whittled down by losses on their savings and high payments on their debts.  Even though banks like this have been shown (and fined billions) to cheat their customers again and again, they have been given billion dollar bailouts of public money during hard times.  The CEOs in charge are still on the job.  What is worse is they are paid huge sums that seem to increase yearly.

This trading down of values is true on the political scene as well.  Take Harry S. Truman as an example.  President Truman stated that he would never involve himself in “any transaction, however respectable, that would commercialize on the prestige and dignity of the office of the presidency.”

After his term, he lived modestly so he could get by on a $112.56 monthly Army pension and his savings.  It is said he saved as much as 20 or 25 percent of his $75,000 annual compensation (from April 1945 to January 1949, and $100,000 thereafter).

Truman’s net worth was estimated to be $750,000 so only his prudent retirement planning and modest living habits provided for an adequate retirement.

The Clinton family on the other hand who had a negative net worth when Bill Clinton left the presidency (due to legal fees related to the Monica Lewinsky affair) make tens of millions a year.

When middle class Americans (or British) see those who should be serving them, taking advantage; they become angry, especially when the middle class lifestyles are being eroded.

“Trading Down” is a great unsettling change.

The Brexit and Trump arguments are symptoms of such a change in the Western World that we could call it Civil War II.   I nor anyone knows how it will turn out, but there are practical ways to make sure that we are not ruined by the battle.

One of the most important steps is to seek value.  For example the UK and US political struggles have the potential to bring bad and good.

However the UK Stock Market reflects the risk where as the US market does not.  Look at these figures from a recent lesson about value investing in our Purposeful investing Course (Pi).

Both the US and UK face many unknown factors.  The UK market reflects these risks.  Look at the fundamentals.  According to the analysis of Keppler Asset Management shares in the US market are selling at a premium of 3.96 times book value.

The UK market is selling at 1.41 times book value.  The average dividend yield of the US market is 1.63%. The UK is more than double at 3.90%.

Compare the US and UK, as of Sep. 30, 2020 below.

keppler

Both markets offer great long term opportunity with short term risk.

The UK has a good risk reward ratio.  The US does not.

Is one guaranteed to rise more than the other? 

No one knows but the Top Value strategy we research in our Pi course shows that investing into a diversified equally-weighted combination of top value markets during times of turmoil and tension offers the highest expectation of long-term risk-adjusted performance.

This is the best way to protect against risk and increases the odds for profit.

Gary

Coronavirus and the Stock Market Round Two

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse,the DJIA is almost back to its December 2019 level.

stocks

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

Such delays have profound implications for older generations who may need to cash in equities for income.  How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past five years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course (Pi) to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

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

Our Purposeful Investing Course (Pi) teaches 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 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 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, China, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, Colombia, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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.

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.

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.

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.

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 our seminar.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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 during the pandemic to introduce you to this online course  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.

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 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

 

 

Better Value Now


Here’s why I am getting better value in the stock market this month compared to September. 

See how you can get better value too.

pixabay

Last week we sent our Purposeful Investing Course (Pi) subscribers an October 2020 developed market update that provides immediate information about 23 major stock markets around the globe (essentially all of the world’s developed markets).

That update is based on an examination of every stock listed in the 23 developed equity markets.

The subscribers saw how in September 2020, six markets were up and seventeen markets declined.

The stock markets in Denmark (+3.3%), Sweden (+3.0%) and Ireland (+1.0%) gained most.  Stock markets in Israel (-7.9%), Austria (-7.0%) and Hong Kong (-5.2%) had the lowest returns.

They also saw that Year-to-date, Denmark was still the best performing market, up  +20.2%.

The review of these markets includes data dated back to 1969.  A model portfolio, based on the Top Value Strategy we use, that was started in December 1969 at $100, is now worth $33,413.

The review also showed that this model portfolio is very safe, far less volatile than any one share or even any one stock market as a whole.   Yet like any stock portfolio it does not rise all the time.  In fact in 2020 year-to-date, this portfolio is down 15.8%.

The secret in this type of investing is to accumulate during down times because, the portfolio offers better value when rices are down.

The basis for deciding what’s a good value or poor value portfolio is in part the price-to-book of the entire market and the average dividend yield.

According to the analysis we use for our Pi course the tables below shows how the Developed Markets Top Value Model Portfolio compares to three alternatives at the end of  August and September 2020 including price-to-book  (PBV) and average dividend yield (DY):

End of August 2020

keppler

Values at the end of August 2020

The Top Value Portfolio was available at 1.26 times book in August, but is available at 1.24 times book now.  In addition the average dividend has risen  from 3.36% to 3.44%.

End of September 2020

Screen Shot 2020-10-06 at 7.15.42 AM

Values at the end of September 2020

Dollar Cost Average

When investors create a dollar cost average strategy using a top value portfolio strategy, they get the largest amount of equities at the best price, that pay the highest dividend.

Here are the eight top value developed markets as of the end of September 2020.

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

According to the analysis, we track for our Pi course, this Developed Markets Top Value Model Portfolio is now undervalued by 41% compared to the MSCI World (Standard) Index, by 53% compared to the MSCI USA Index and by a whopping 68% compared to the MSCI World Growth Index.

Gary

Add Safety, Profit & Get Paid Double

The next four years will be a period of high overseas stock growth.

The chart below shows the last 26 years of real-time forecasting by the global equity analyst we track to make our portfolio decisions.

The analyst is Keppler Asset Management and the index they create The KAM Equally Weighted World Index is 15.4% below the value that the analyst forecast four years ago in September 2016.

The chart shows how in the past, two and a half decades there have been four opportunities (red Xs) when the entry levels in global markets were below or around the lower valuation band.  In the previous three low points like this, there has always been the highest growth and positive returns three to five years later.

keppler

 

So it’s good to know that if you invest in global stock markets overall, now, you’ll make capital gains over the next four or five years.

More importantly you get paid more income now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not in 2020.

This year equities have been paying a higher yield than bonds.

As of November 2020, according to Ycharts.com, (1)  AA bond yields are at 1.59%.

ycharts.com

 

The US MSCI Index pays a modest 1.68% as of November 2020 .  That’s a terrible yield, but better than the 1.59% you can get in AA rated corporate bonds.

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

Eight solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay more than double the average US yield.  They pay  3.57% compared to the US yield of 1.68%.

keppler

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.

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only five 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 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 uses Keppler analytics to track 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 Purposeful Investing Course (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.

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.

My developed market portfolio has been diversified into eight developed markets: 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 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 most stock markets around the world.

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 higher 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) Ycharts.com corporate bond yields

 

Inflation Fears


Inflation or not… that is the question.

Almost everything I have learned about currencies and economies over the past 52 1/2 years of global investing, is that excessive government spending and debt creates inflation.  I say almost, because the most important lesson gained in these five decades is Golden Rule of Investing #1: “There is always something you do not know“.

I  think we’ll see serious inflation. My only question is how soon.  Yet I could be wrong.

What I do know for sure, is that everyone should have a plan to survive for inflation.

pixabay

The Wall Street Journal article “How to Avoid Paying the Cruelest Tax: Inflation” provides some ideas of what to do and what not to do.

It of course mentions holding gold, but shares a couple of other ideas such as  Chinese bonds and sellers of consumable goods such as grocery stores Kroger and Albertsons.

The article says: Retailers might be another good place to ride out an inflationary wave, though it matters what the company sells and how flush consumers feel when prices start rising. Sellers of consumable goods such as grocery stores Kroger and Albertsons, big box retailers like Walmart and Target and even dollar stores are likely to fare well no matter what the unemployment levels are because they sell essentials.

Food retailers with successful private label brands, which yield higher margins, might see an advantage over those that don’t. Supermarket-branded soup, for example, will look more appealing than Campbell’s at a time when everything becomes more expensive.

The article also calls bonds “Certificates of Confiscation”.

Bonds become “certificates of confiscation.” Broadly speaking, inflation shrinks private savings and bails out people and governments that have borrowed heavily. But not everything withers: Some investments could do quite well.

If the textbooks are right this time then the worst victim of a bout of inflation would be bonds. The 10-year Treasury note, yielding just 0.7%, is already an invitation to lose money.

But not all government bonds would do so badly. Consider China. The Treasury of the world’s second-largest economy has been relatively restrained in terms of stimulus. Nominal ten-year Chinese yields, currently at 3.15% according to FactSet, are around 2.45 percentage points higher than U.S. Treasurys, and the gap in real terms is even higher. If U.S. inflation accelerates, and especially if the Fed keeps rates low anyway, then that return could get an extra boost from the impact of a falling dollar relative to the yuan. No wonder foreign investors bought nearly 300 billion yuan ($44 billion) of Chinese government debt in the first eight months of 2020, triple the amount during the same period last year.

 

wsj.com

The article includes the graph above.  We have to ask ourselves, “what happens to out investments, if we see inflation similar to the 1970s and 19080s?

Investors worried that record budget deficits and massive Fed bond buying will stoke a big rise in inflation have places to hide aside from hoarding gold coins—some of them surprising

It is tempting to trust that inflation went the way of disco and bell bottoms, but hope isn’t a strategy. Investors concerned about protecting the buying power of their savings don’t need to take refuge in precious metals or cryptocurrency—there are some plain vanilla options that could hold up well.

With their portfolios gyrating and an election looming, investors are spending more time than usual pondering what their taxes will look like in the future. But they haven’t given much thought lately to “the cruelest tax”—inflation. Maybe they should.

The article also suggests that the stock market overall might not be the best solution.

wsj.com

The chart above, from the article, shows how inflation can eat into stock market performance.

The article explains the problem.  In theory stocks offer a natural hedge against inflation, at least compared with bonds. Businesses that can raise their own prices should be able to grow their earnings more quickly, helping shareholders keep pace. Since 1880 equities have risen by more than inflation 88% of the time on a rolling, 10-year basis, according to a study by Goldman Sachs.

But Goldman found the highest real—or inflation-adjusted—returns for equities came when inflation was low. In 10-year periods where the consumer-price index rose by between 0% and 1.5% on average, the S&P 500 posted a real annual return of 10.6%. That return fell to 8.7% when inflation is between 1.5% and 2%, and to 6.5% when inflation is between 2% and 2.5%. When inflation is above 6%, the average annual real return was just 1.2%.

This information suggests that if we see high inflation again, he real return in the stock market might barely be above zero for an extended period of time.  We should build this risk into our financial plans.

I personally include a lot of income producing, appreciating real estate in my plan.  PLus my equity portfolio is based on holding good value shares as explained below.

Gary

Add Safety, Profit & Get Paid Double

The next four years will be a period of high overseas stock growth.

The chart below shows the last 26 years of real-time forecasting by the global equity analyst we track to make our portfolio decisions.

The analyst is Keppler Asset Management and the index they create The KAM Equally Weighted World Index is 15.4% below the value that the analyst forecast four years ago in September 2016.

The chart shows how in the past, two and a half decades there have been four opportunities (red Xs) when the entry levels in global markets were below or around the lower valuation band.  In the previous three low points like this, there has always been the highest growth and positive returns three to five years later.

keppler

 

So it’s good to know that if you invest in global stock markets overall, now, you’ll make capital gains over the next four or five years.

More importantly you get paid more income now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not in 2020.

This year equities have been paying a higher yield than bonds.

As of November 2020, according to Ycharts.com, (1)  AA bond yields are at 1.59%.

ycharts.com

 

The US MSCI Index pays a modest 1.68% as of November 2020 .  That’s a terrible yield, but better than the 1.59% you can get in AA rated corporate bonds.

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

Eight solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay more than double the average US yield.  They pay  3.57% compared to the US yield of 1.68%.

keppler

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.

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only five 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 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 uses Keppler analytics to track 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 Purposeful Investing Course (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.

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.

My developed market portfolio has been diversified into eight developed markets: 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 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 most stock markets around the world.

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 higher 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) Ycharts.com corporate bond yields

www.wsj.com: How to avoid paying the cruelest tax inflation

The Casino of Life


How are casinos and stock markets the same?

pixabay

Well, both can be addictive.   When the stock market is in a raging bull phase, it’s like a party no  one wants to leave. The continual creation of wealth for doing nothing (that’s imagined) stimulates the brain’s reward system.  The higher and longer the market rises, the greater the stimulation.

Investing in a bull market without a strategy is gambling and can become as addictive as the slots.

A Mayo Clinic  article (1) says: Compulsive gambling, also called gambling disorder, is the uncontrollable urge to keep gambling despite the toll it takes on your life. Gambling means that you’re willing to risk something you value in the hope of getting something of even greater value.

Gambling can stimulate the brain’s reward system much like drugs or alcohol can, leading to addiction. If you have a problem with compulsive gambling, you may continually chase bets that lead to losses, hide your behavior, deplete savings, accumulate debt, or even resort to theft or fraud to support your addiction.

Gambling can ruin your life.  The answer to a Quora.com question, “What is the saddest thing a casino dealer has seen at their table?” shows how damaging addiction can be.

I worked in the Slots department of a Reno casino while in college. One night I walk up on a woman who had hit a progressive royal flush on nickel video poker – her win was around $215. She was crying so I ask if she was okay. Her reply was that she was not going to get evicted and she could get her guitar back from the pawn shop with the winnings. After we paid her, she insisted on tipping us $20 (pretty generous for a win on a nickel machine). I tried to gently refuse but policy was to graciously accept the tip and my supervisor was there. Even sadder was that she kept playing – I tried to casually encourage her to leave but she kept on playing and ended up putting nearly $100 back into the machine. I never learned if she got evicted or got her guitar back.

What’s the difference?

pixabay

The big difference is that in the long run, in a casino the odds are against you.  In stock markets the odds, in the long run, when properly diversified, are stacked for you.

With only a few exceptions, if you play the casinos long enough, you are guaranteed to lose.

With only a few exceptions, if you have a diversified portfolio in a stock market, and hold for an extended period you are guaranteed to win.o

However, it is all too easy to treat stock markets like casinos.

wsj.com

The image above is from the Wall Street Journal article, “IPO Market Parties Like It’s 1999”.

The article tells how even in the midst of a recession, investors are pouring money into newly public companies at levels on par with the dot-com era.

The article says: Many businesses are struggling. Millions of Americans are out of work. But the IPO market is the hottest it’s been in years—and 2020 could be its biggest year ever.

With three months left on the calendar, U.S.-listed initial public offerings have raised nearly $95 billion through Wednesday, according to data provider Dealogic. That already surpasses the totals of every year except 2014 since the tech bubble in 2000. It’s nipping at the heels of 2014, when IPOs raised $96 billion, more than a quarter of it by Alibaba Group Holding Ltd. BABA 1.81%

Bankers, lawyers and executives say that if the frenetic pace keeps up, 2020 will eclipse the tech-boom years of 1999 and 2000, when investors feverishly pumped money into burgeoning internet stocks before they crashed to Earth.

Investors are gobbling up these new listings, with this year’s IPOs posting the biggest gains during their trading debuts since 2000, at 22% through Wednesday. On average, 2020 IPOs have risen roughly 24% from their original prices.

This type of euphoria is a sign that investors are treating markets like casinos.  Investors are not investing, they are gambling.  Investors are buying with only one expectation, that their holdings will continually rise.   There is no strategy for obtaining value.

The higher and faster a market rises the greater the danger.

Two quotes from Yuvall Harari, author of “Sapiens” explains the danger.

The first quote explains the nature of the risk.

Nothing captures the biological argument better than the famous New Age slogan: ‘Happiness Begins Within. ‘ Money, social status, plastic surgery, beautiful houses, powerful positions – none of these will bring you happiness. Lasting happiness comes only from serotonin, dopamine and oxytocin.

Our nature is to seek pleasure and especially in the current turbulent times, a kick each morning as the stock market rises, is better than a cup of coffee.

This trap is easy to fall into, because an ever rising stock market is such a simple story.

Harari explains it in the second quote:  “Humans think in stories rather than in facts, numbers, or equations, and the simpler the story, the better.”

Protect yourself  with facts, numbers and equations.

Value equities bring higher returns long term.

The 41 year Risk & Return charactoristics of investing in value can be seen in the numbers below.

Over 606 months, value shares returned 12.9% per annum versus 9.86% for an equally weighted portfolio of all shares.

keppler

The chart below shows the difference in return more graphically.  $100 invested in the top value shares, over the 41 years, grew to $44,843 versus $11,548 for the equally weighted portfolio of all shares.

keppler

Time is the key!  Please note that in the past 10 years of the Risk & Return charactoristics above that the equally weighted portfolio of all shares has out performed the value shares seven years out of ten.

The chart below shows that the S&P 500 has also outperformed my value share strategy so far in 2020.

pifolio

Yet the fact remains that value shares currently pay twice as much dividend (on average) and are selling at less than a third price-to-book  of US shares.

See more about how to invest long term in value shares below.

Gary

Add Safety, Profit & Get Paid Double

The next four years will be a period of high overseas stock growth.

The chart below shows the last 26 years of real-time forecasting by the global equity analyst we track to make our portfolio decisions.

The analyst is Keppler Asset Management and the index they create The KAM Equally Weighted World Index is 15.4% below the value that the analyst forecast four years ago in September 2016.

The chart shows how in the past, two and a half decades there have been four opportunities (red Xs) when the entry levels in global markets were below or around the lower valuation band.  In the previous three low points like this, there has always been the highest growth and positive returns three to five years later.

keppler

 

So it’s good to know that if you invest in global stock markets overall, now, you’ll make capital gains over the next four or five years.

More importantly you get paid more income now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not in 2020.

This year equities have been paying a higher yield than bonds.

As of November 2020, according to Ycharts.com, (1)  AA bond yields are at 1.59%.

ycharts.com

 

The US MSCI Index pays a modest 1.68% as of November 2020 .  That’s a terrible yield, but better than the 1.59% you can get in AA rated corporate bonds.

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

Eight solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay more than double the average US yield.  They pay  3.57% compared to the US yield of 1.68%.

keppler

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.

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only five 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 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 uses Keppler analytics to track 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 Purposeful Investing Course (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.

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.

My developed market portfolio has been diversified into eight developed markets: 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 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 most stock markets around the world.

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 higher 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) Ycharts.com corporate bond yields

(1) www.mayoclinic.org/diseases-conditions/compulsive-gambling/symptoms-causes/syc-20355178

(2) www.wsj.com/articles/ipo-market-parties-like-its-1999-11601052419

 

Fear This


What would you do if the Dow dropped 5,000 points tomorrow?

Really?  Be honest with yourself.

I know how I would react because I remember a phone call.

My mother-in-law.

The least investment oriented person in the world but… even she was in a panic.

That call was Oct. 19, 1987.

The Dow Jones Industrial Index had crashed more than 20% in one day.

She wanted to know, “will this crash get worse?”

The truth?

I did not know.

When it comes to investing…  there is always some risk.

geese

Investments are like a flock of geese.

We know they go north in spring.

But exactly when they fly is a mystery.

We know they go south in the fall.

Yet not the exact day.

Nor can we say precisely which goose will lead… for how long…  at what time.

The movement of geese and the price movements of equities are both ruled by laws of nature that we can never totally know.

The chances of seeing a gaggle of geese migrating south in October is more likely, but ask any hunter, photographer or bird watcher sitings are hardly assured… especially at any specific time.

When it comes to investing…  there is always something we do not know.

There are, however, three things we do know about the stock market.

#1: Periods of high performance are followed by periods of low performance (and vice versa).

#2: Periods of low performance move more quickly that periods of high performance and usually start with a sudden drop.

#3: We are more likely to see a period of low performance begin in September or October.

We increased volatility in September as the DJI remains near an all time high .

Now we face October.

Extensive research shows that basically in all major equity markets, nearly all returns are achieved from the beginning of November through the end of May.   October is often the bewitching month for the stock market.

Will the stock market be good or bad this month?

We do not know, but we do know that another law of nature, one that prepares us as humans to survive, leaves most of us ill prepared emotionally to trade in shares.

The Wall Street Journal article “Will You Be Ready When the Stock Market Crashes Again?” (1) dramatizes our human frailties when it tells this true story.

With U.S. stocks near all-time highs, election jitters, the President testing positive for Coronavirus and the potential for an expanded pandemic,  let’s slip back to October, 33 years ago to Friday, Oct. 16, 1987.

The article said: James O’Shaughnessy, a young investor in St. Paul, Minn., has made a “five-figure” bet on stock-index put options, a way of profiting from a sharp fall in price on a basket of big U.S. stocks. Plugging his phone into a modem that dials up a stock-quotation service, he grows more and more nervous as the day goes on and the Dow Jones Industrial Average falls a record 108.35 points on unprecedented volume of nearly 339 million shares.

The selling is “completely overdone,” he thinks: Stocks are bound to bounce back big on Monday “and then I’ll get killed” for hanging on to the bearish bet. “A feeling of panic washed over my entire body,” Mr. O’Shaughnessy says. “I’ve just got to get out.” He calls his broker a half-hour before the market closes and sells it all.

Humans have a bias against risk.

Feelings that we’ll “get killed” for holding our bets are natural. Panic washes over our entire bodies. This emotion creates a performance gap.  Investors overall earn less than the sector they invest in.

This performance gap is very real.  We should face this fact and prepare for it.

The WSJ article tells how O’Shaughnessy missed a huge opportunity.  On October 17, 1987 he sold his his puts, to avert a huge loss.  The next day the Dow drops 208 points in the first 90 minutes, of trading.

A wave of global selling caused the Dow to fallen 22.6%, “the worst day in Wall Street history,”.   That’s the equivalent of a 5,000 point drop today.  He lost a 1,000% one day profit!

The article continues: You can’t survive a market crash if you think it can’t happen. And something like Oct. 19, 1987, will happen again. In fact, it already has: On May 6, 2010, many stocks dropped 60% or more in a flash, although they bounced right back. On Aug. 24, 2015, the Dow fell more than 1,000 points, or 7%, in six minutes, before closing down nearly 4% for the day. Between the market’s peak in October 2007 and its bottom on March 9, 2009, the S&P 500 fell 55.2%, even after counting reinvested dividends.

Take it from Mr. O’Shaughnessy, who today manages nearly $6 billion at O’Shaughnessy Asset Management in Stamford, Conn. Even though he based it on factors he no longer believes in, his original analysis was absolutely right: The stock market was overvalued. Between September 1986 and the end of August 1987, stocks had gone from trading at 16 times earnings to a price/earnings ratio of 21.4, a 33% rise that put the market’s P/E at its highest level since the end of 1961.

His emotional reaction, however, was dead wrong. Had Mr. O’Shaughnessy held his ground for one more day, he would have made roughly 10 times his money, he recalls.

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 turbulence caused by the pandemic, and the US heading toward the election makes this a more likely time.

Yet we cannot be sure.

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

So have a strategy and do not panic if the market gets slaughtered in October.  

All stock markets have risk and volatility. Plan for this fact.

My strategy invests in ETFs that invest in good value markets, based on their price-to-book,  P/E ratio and average dividend.

The numbers below from Keppler Asset Management, another source of data we follow in our Purposeful Investing Course,  shows that the price-to-book of the MSCI US Share Index at 4.11 price-to-book, barely below the super inflated price to book of 4.23 in December 1999.

keppler

 

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 your 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.

Gary

Add Safety, Profit & Get Paid Double

The next four years will be a period of high overseas stock growth.

The chart below shows the last 26 years of real-time forecasting by the global equity analyst we track to make our portfolio decisions.

The analyst is Keppler Asset Management and the index they create The KAM Equally Weighted World Index is 15.4% below the value that the analyst forecast four years ago in September 2016.

The chart shows how in the past, two and a half decades there have been four opportunities (red Xs) when the entry levels in global markets were below or around the lower valuation band.  In the previous three low points like this, there has always been the highest growth and positive returns three to five years later.

keppler

 

So it’s good to know that if you invest in global stock markets overall, now, you’ll make capital gains over the next four or five years.

More importantly you get paid more income now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not in 2020.

This year equities have been paying a higher yield than bonds.

As of November 2020, according to Ycharts.com, (1)  AA bond yields are at 1.59%.

ycharts.com

 

The US MSCI Index pays a modest 1.68% as of November 2020 .  That’s a terrible yield, but better than the 1.59% you can get in AA rated corporate bonds.

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

Eight solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay more than double the average US yield.  They pay  3.57% compared to the US yield of 1.68%.

keppler

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.

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only five 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 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 uses Keppler analytics to track 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 Purposeful Investing Course (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.

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.

My developed market portfolio has been diversified into eight developed markets: 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 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 most stock markets around the world.

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 higher 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) Ycharts.com corporate bond yields

(1)  wsj.com: Will you be ready when the stock market crashes-again

Three Prong Boomer Investing


Last Saturday’s message look at how current economic circumstances is transferring wealth from Boomers to younger generations.

That message outlined how low interest rates are one of the economic conditions that shifting purchasing power away from Boomers to younger generations.

A wealth transfer is good.  Our children and grandchildren need economic success too, but we Boomers, born from 1946 to 1964, should also have a way to invest to protect our standards of living.   Helping younger generations increase their affluence does not accomplish much if they  they have to spend their new gotten gains caring for destitute parents and grandparents!

pixabay

How low can they go?

Capitalistic logic suggests that interest rates on long term savings should at least equal inflation so the investments maintain purchasing power.

That is not what’s happening now globally .

My friend Thomas Fischer at ENR Asset Management sent me this note during the week that shows an amazing new interest phenomenon that’s about to take place in Denmark.

Hi Gary

A new low (or high depending on your angle) for Danish mortgage rates!  A 10 year fixed mortgage minus 0.50% will be introduced on Oct 1!

Imagine that… the bank pays you to borrow!

Such low rates force us to make riskier investments and that’s OK, if we are prepared for it.

However we have lived in an atmosphere that trained us and the entire economic system to use interest bearing instruments for asset safety, especially when the investments are needed to provide income.

Long term, the stock market is a good place to invest, but the chart below from macrotrends.com, shows that, as in the 1930s and 1960s,  when the US market falls from an all time high, it can take 30 years to recover.

macrotrends chart

The recovery time gap was much shorter  after the 2000, 2010 and 2020 crashes.  Or were these recoveries part of another 30 year trend that is not over for another decade?

We cannot dismiss the chance that we are in a 30 year era that started in 2000 and will end with the Dow Jones Industrial average being around 16,000 (the 2000 high) in 2030.

Maybe we will see this.  Maybe we won’t.  Younger investors are in a better position to be OK because history suggests there will be a super appreciation after the old high is truly breached.

Many Boomers cannot wait till 2030 to find out.  They’ll need to draw on their equity investments before then.

What should Boomers do?  Start with what you love and create PIEC wealth.

There is a three path strategy that Merri and I have followed over the decades for fulfillment and wealth.  I call it PIEC  Investing (Personal Income Earning Corridor).

PIEC concepts of financial prudence differ from traditional approaches of accumulating wealth because the first investment in our investment strategy is based on our passion…  not neccesarily profit.   Our total PIEC portfolio comes in three layers: a fulfilling micro business, then a layer of very safe investments followed by a third, much smaller layer of speculative deals.

The first layer of our PIEC is a fulfilling micro business.  When we do what we love, our own micro business is the most important financial asset we can have.  PIEC investors reverse the priorities.  Instead of working for money to save and invest,  they focus their prime effort on doing something they enjoy.  Then they learn how to enjoy the effort in some profitable way by combining lifestyle with the necessary task of accumulating wealth.

The ability to provide a service or a skill is the safest as well as most meaningful investment of all.  This combines our money with time, energy and our desires.  There is no more effective way to combine wealth, health and a fulfilled lifestyle.

Merri’s and my passion are writing and appreciating rental real estate.

I am up usually before the dawn writing… not just for the income but because I love the process.

rental

One of the many houses we bought, rented and resold.

Later in the day, we drive around, almost every day, looking for  houses for sale.  We have a certain niche of house we want to buy.  We’ll rent it for at least a year, then freshen and fix it up (better kitchen, bathrooms, yard) for resale.  We enjoy the looking. It’s like mining for gold and that specific house (we know it when we see it) is like a big nugget of gold.

The feeling as we drive around is, “the hunt is on”!  We also enjoy the creative process that comes in upgrading the house.

Writing and real estate are the micro businesses we love that brings us profit and helps the wealth transfer from our generation to the next.  We share the profits we make on the upgrades with our younger helpers.

The second step is our good value equity portfolio.  The majority of our PIEC diversification is in a portfolio of country ETFs that invest in good value stock markets. (See more on this below).

These good value ETFs,  I would like to hastily add, have not kept up with the US market for the past five years.

Our equity investments over the last half decade would have gained more had we invested just in the NASDAQ or the S&P 500 or DJI indices.

A five year comparison with other markets however is not the point, or at least it should not be.

There will always be something better than your investments.

Your portfolio should not be created to get the highest return in the world, because we never know what any one equity or market will do in the future.

Every person’s portfolio should be geared to their unique wants, needs and desires.

My good value portfolio first and foremost takes very little time, energy or cost to manage.  Those savings are important to me as I need my time for real estate and writing.

Second though my portfolio has under performed the US equity markets for the past five years, it has appreciated much better than inflation and paid about 3.5% in dividends.  That’s my goal to beat inflation and get 3% income or more.

Third, without fuss and without bother and without time, energy and trading costs, I continue to accumulate value that, based on mathematical probability, will provide the highest long term return.

When I began accumulating value market ETFs at the end of 2015 the average price-to-book of the good value portfolio was 1.26 with an average dividend of 3.51%.   That compared to the US MSCI Index price-to-book of 2.62 and an average dividend of 2.24%.

Here were the value statistics I used to start my good value portfolio in December 2015.

keppler

Now the price-to-book of the good value portfolio is still 1.26, but the US MSCI Index price-to book has skyrocketed 4.11.

The average dividend of my good value portfolio is still above 3 percent at 3.36%.  The US average dividend has collapsed to just 1.56%.

keppler

It’s also worth noting that the USA MSCI Index is at 4.11, near the MSCI World all time high of 4.23.

Based on the math, my equity investments have become increasingly better deals.

The third layer of diversification is our speculation.   Modern portfolio theory suggests that safe investments are enhanced and made safer by adding a small amount of higher risk deals.  This also allows us to fulfill any casino mentality we might have left if having our own business is not enough.

Our speculations over the past half decade include an investment in sandalwood, plus extra weighting in China, extra weighting in the UK and in the silver ETF SLV.

The extra Chinese (up 32%) and silver investments (SLV is up 72%) have done OK.  The UK (down 22%) and sandalwood have not (the sandalwood company went bust) done well.

A friend, an investment manger I have worked with for decades and trust, sent me a note two days before the IPO of Snowflake.

Hi Gary, I’m having breakfast with an employee of a company that uses Snowflake in London.

She told me the Snowflake IPO tomorrow would be a very good buy. Its a cloud data warehouse that has a unique template for coding etc. My friend’s company uses it and Warren Buffet has taken a stake. She told me many banks are looking to outsource own data warehouses to snowflake.

That was a good tip, the shares went from $120 a share to $245 a share first day.

I did not take up this tip because it’s in the human nature to worry more about loss than about profit and the goal of my investments is to sleep better.

The way I overcome risk aversion is to invest in ideas I have confidence in.  Since I know little about data warehousing, it did not fit into my strategy.

Investing in rumors, tips and the news, leaves me very uncertain and vulnerable to risk aversion.  I knew nothing about Snowflake. I do not feel comfortable with IPOs so passed on the tip and do not feel bad in the least that I did not double an investment over night.

Instead I have been making higher interest loans secured by real estate to younger friends who I know, like and trust.  The loans generate income that is higher than inflation and while they do not have “double your money overnight potential”, they provide a great deal of fulfillment by helping people we care about.

This three step strategy enhances our investing safety, increases our odds of extra profit, but most importantly matches our needs at our age and brings greater satisfaction and fulfillment into our lives.

Boomers, our standards of living are under attack.   This is part of the natural order, the old giving way to the new, but we can profit by helping rather than hindering this process.

Gary

Add Safety, Profit & Get Paid Double

The next four years will be a period of high overseas stock growth.

The chart below shows the last 26 years of real-time forecasting by the global equity analyst we track to make our portfolio decisions.

The analyst is Keppler Asset Management and the index they create The KAM Equally Weighted World Index is 15.4% below the value that the analyst forecast four years ago in September 2016.

The chart shows how in the past, two and a half decades there have been four opportunities (red Xs) when the entry levels in global markets were below or around the lower valuation band.  In the previous three low points like this, there has always been the highest growth and positive returns three to five years later.

keppler

 

So it’s good to know that if you invest in global stock markets overall, now, you’ll make capital gains over the next four or five years.

More importantly you get paid more income now!

Current markets have turned economic history upside down.  Normally bonds pay the highest interest rates and add safety to a portfolio.  Not in 2020.

This year equities have been paying a higher yield than bonds.

As of November 2020, according to Ycharts.com, (1)  AA bond yields are at 1.59%.

ycharts.com

 

The US MSCI Index pays a modest 1.68% as of November 2020 .  That’s a terrible yield, but better than the 1.59% you can get in AA rated corporate bonds.

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

Eight solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay more than double the average US yield.  They pay  3.57% compared to the US yield of 1.68%.

keppler

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.

During the past five years, I have been steadily accumulating the same good value ETFs.  I have traded only five 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 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 uses Keppler analytics to track 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.

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Our Purposeful Investing Course (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.

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.

My developed market portfolio has been diversified into eight developed markets: 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 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 most stock markets around the world.

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 higher 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) Ycharts.com corporate bond yields