International Investments in Indonesia

by | Sep 21, 2006 | Archives

International investments in Indonesia can help protect against a market crash caused by seasonality. Seasonality studies show that more than 90% of all profits in the US stock market are made during the months of November through April. Investors who have invested in the Dow for example in only the months of May through October have actually lost money over the past 35 years.

International Business in Roses can help protect your international investments as well.

Let’s look at international investments in Indonesian rupiahs first.

October is an especially dangerous month for the US stock market. This is statistically true and many investors especially remember Black October 1987.

There are several factors about this upcoming October that should give us pause.

First, many conditions are in position so the US dollar could fall…dramatically. See yesterday’s message which looks at this at International Investments – Why the US Dollar May Fall Now

The next concern is that slowing house prices could cause the US economy to decline and the stock market to crash.

A reader recently sent me this message.

Dear Gary,

The linked chart produced by Todd Harrison of CBS Market Watch shows a very high correlation between the 12-month lagged NAHB Housing Index and the S&P 500 over the last 10 years. If this correlation persists, Market Watch is suggesting that there could be a 50% drop in the S&P by the end of the year.

Warm regards,

See 10 Year Performance: NAHB Housing Index vs S&P 500

At our International Business and Investing Course last weekend we looked at this risk and viewed ways to protect and profit from a crash if it comes.

Here is Thomas Fischer discussing economic conditions at the course. Note the roses. They came fresh cut from Ecuador . More on this in a moment.

One way to protect against a US currency and stock crash is to diversify part of the portfolio in emerging market bonds.

Jyske Bank publishes a dynamic model portfolio to help readers understand what is happening in emerging bonds. Recently their model sold Icelandic kroner bonds and invested in Indonesian Rupiah bonds.

In the medium term, the bank is bullish about the emerging-markets. The bank feels that US interest rates are peaking and that most countries have good economic fundamentals.

This means that markets will be buoyant but moving away from the US dollar. Many emerging markets are also maturing. Sensible fiscal and monetary in many nations means that their debt is reduced and inflation lowered. Yet emerging interest rates still offer a premium.

Fundamentals also suggest that emerging currencies may appreciate again. This means investors get extra income plus a chance for capital growth.

Jyske’s model portfolio is dynamic and in June the portfolio switched out of South African Rand (ZAR) and into Icelandic kroner (ISK). This created a very nice return. The income on ZAR from 6 June to 14 Sept. was -6.28%. The return on ISK was +11.30%.

Now the model has switched from the ISK to Indonesian Rupiah (IDR) bonds. The bank feels that the ISK is overbought, and income from the ISK has declined. IDR fundamentals are good. Indonesia ’s growth is on the increase while inflation and interest rates are on the decline. The IDR returns are good. The short term AAA rated European Investment Bank bond that matures May 30 2008 30.05.2008 currently yields 9.71%.

Of course all potential rewards also carry risk. A slowing US economy can have adverse affects on emerging markets. Emerging markets are dependent on exports to America which could slow. This has had some impact on Jyske’s model. The return on their emerging market is down 2.74% this year.

Jyske launched this portfolio January 23 2003. The portfolio was up 14.70% in 2004 and up 27.49% in 2005.

Here is the portfolio as of September 14, 2006.

8.00% Mexico19.12.2013Mexican peso8.07%Baa1/A
9.50% EIB30.05.2008Indonesian Rupiah9.71%Aaa/AA+
6.75% HGB12.02.2013Hungarian florin7.69%A1/
12.50% Brazil05.01.2016Brazil Cruzero12.36%Ba2/BB
18.00% Rabobank24.07.2008Turkey TRY18.07%Aaa/AAA

The average income on this portfolio is 11.18% before foreign exchange loss or profit.

Join Merri, Currency Experts from Jyske Bank and me at our next International Business and Investing Made EZ course in Ecuador. Review which current markets offer good value. Meet Steve our man in Ecuador and learn about products to export. Meet Dr. Andres Cordova and learn about owning real estate in the Galapagos. Go to International Business and Investing Made EZ in Ecuador

Emerging market bonds is one way to increase profits and diversify against risk.

The Borrow Low-Deposit High MultiCurrency strategy is another. Our Emerging Asian Portfolio is now up 98% in less than a year!

Double your profit potential with the MultiCurrency Sandwich. Leverage investments in top value markets. See Annual MultiCurrency Sandwich Service

International Business in Roses

However the ultimate protection against change is your ability to run your own international business. This is why I have been mentioning roses!

Here are some more of the roses we shipped from Ecuador for last weekend’s International Business and Investing Course. We ordered 200 glorious, fresh cut, long stem roses….really fresh. They were cut in Ecuador on Sunday. The cost was only $168 or about 80 cents a rose including shipping! The delegates loved them. They opened into glorious fragrant bouquets that are still beautiful (though near the end of their life) nine days later.

As mentioned in a recent message, I have longed for years to help readers get in the fresh rose business. To see why go to A Rose by Any Other Name is a Profit Opportunity

Now a new service is available to help you buy Ecuadorian roses and other flowers and get them shipped immediately at a low cost is now available. You can call 1-866-978-0582 (this redirects straight to Ecuador) or go to New Wholesale Flowers

I performed a test when I ordered these roses for the course. What I learned was important for building a flower business.

First, let me say that these are very different roses from the roses you buy in the supermarket. They open with bright, full heads (as above) and they last. But buying these fresh Ecuador roses cost about the same as what they cost in the supermarket, around $10 a dozen. So to make money you have to sell them at $19 or more a dozen. To get the higher price requires educating the consumer.

At 80 cents a stem I think these fresh flowers can be marketed nicely through a party plan. Imagine this.

Have a party once every two weeks. Teach those who come about the difference between fresh and super market roses. Offer at each party a floral arrangement idea. Sell the roses at $29.99 a dozen. The equivalent flowers purchased from a florist would cost about $69 a dozen!

Here is the test we made. New Wholesale Flowers sells in one (appx. 400), half (200), quarter (100) or eighth boxes (50). If you order $150 or more FedEx overnight delivery is included. When we ordered our roses, we added an order for our just born Granddaughter Sequoia, four dozen fresh pink roses. The price for the 48 flowers was $42. There was no extra shipping as they came with our order. Yet they were in their own box!

We simply separated them and gave the box back to the FedEx man. They had their fresh roses in Portland the next day later.

Here she is with her mom and the roses.

This pre-packaged facility means that if you sold roses to fifty people for example each could already be separated and packaged when they arrived for your party!

This is a great business idea and someone who knows how to operate party plans will make some excellent profits from this!

Until next message, may everything in your life be coming up roses!


P.S. Learn more about buying roses at our upcoming business course in Ecuador . See International Business and Investing Made EZ – Ecuador

P.S. Enjoy the following services and courses in Ecuador in the autumn and winter of 2006-2007.

October 12-16, 2006 – Learn how to learn, retain and process information better + Spanish. Super Thinking + Super Memory + Spanish

November 9-12, 2006 – International Business and Investing Made EZ – Ecuador

November 13-15, 2006 – High Andes Tour. Discover the Mystical Andes

January 5-7, 2007 – Inspired Investing beyond Logic. Vedic Astrology in Ecuador

January 8-10, 2007 – Ayurvedic Cleanse.

Jan 12-14, 2007 – Join Merri, Todd and me for a Wedding Photography Course

Todd Smith Photo

February 2-8, 2007 – Learn how to Earn anywhere through Import – Export. Gary & Merri Scott’s Import/Export Expedition in Ecuador

Any time that space is available. Rejuvenate your health with a week’s R & R at El Meson. See R&R at El Meson

Any time that space is available. Stay a month in El Meson and enjoy the full winter sun. El Meson de las Flores Hometel