International Investments – Investing in Currencies that are Turkeys

by | Oct 2, 2006 | Archives

International investments can enhance your wealth, especially if you have a bird’s eye view. But we have to watch out for international investments that are turkeys. Everything we invest in abroad is farther away from home. Cultures and rules differ and the investment is beyond our regulators, legal system (for what that’s worth) and the news.

However, the US dollar may be the biggest turkey of all. Any one currency can have risk so, like it or not, we must look beyond our borders!

I am reminded of this because one great pleasure is sharing my mornings with a flock of wild turkeys that graze in our front yard. There is delight in their slow, pecking amble. They are happy, content, just doing what turkeys do…but one or two are always watching…staying alert. Turkeys have incredible bird’s eye views!

Eleven of them are on our front porch. I watch them through our Pella double doors, not more than ten yards away.

However times change. The flock began this year as two big hens and 13 small chicks. The little ones are now fully grown but the flock diminished. Last week there were thirteen. Now there’s only eleven. By the time we head south foe winter in Ecuador, the flock will be gone.

Never mind next spring another will return!

So too do markets and currencies change as their values rise and diminish. They come and go as does the opportunity they offer.

So when is Turkey a turkey….and not.

Turkey in our front yard. Turkey can create good international investments or turkeys.

Earlier messages explain how I invested in Turkish Lira (TRY) denominated bonds that promptly dropped 15% or so. Then I added Turkey shares to make up the loss. Now it appears that Turkey bonds have returned to offer good value.

Jyske Bank recently summarized Turkey bond opportunity in their emerging markets report in this way:

• The real 3-month interest rate is currently 9.79% – one of the world”s highest
• Good entry levels after the recent turbulence
• The TRY/DKK rate is 3.88
• TRY can fall a good long way before investors lose money
• We recommend a 1-year TRY-denominated bond with a fine rating
• Get a premium of 15% p.a. over the yield on a Danish one-year bond
• A BUY-and-HOLD-to-maturity bond
• Buy the 18.50% EDC maturing on 26 September 2007
• Yield to maturity = 19.20 % p.a.
• Break-even at TRY/DKK 3.26!

You can read Jyske’s entire analysis

Imagine the potential of a Borrow Low – Deposit High Portfolio that borrows Swiss francs and Czech Koruna to invest in Turkish bonds. Interest on Swiss francs is 3.125% and koruna 3.75%. The yield on the EDC 26 September 2007 Turkey TRY bond is 18.50%.

$100,000 invested. $200,000 borrowed. The average cost of the loan is 3.44% or $6,800 on $200,000. The loan fee is $2,000 (for five years). Income on the total $300,000 at 18.50% is $55,500. Deduct the interest and fee and you have $46,700 or 46.7% return.

You may just want to invest in Turkey bonds and be happy with 18.5%. You may want leverage but this contains extra risk as well. Leverage enhances reward and risk. For example, at two to one leverage if the Turkish TRY drops 10% your immediate loss is 30% so be sure to calculate the potential losses as well as profits!

You can get more information on Turkish bonds from Thomas Fischer at Jyske Bank at

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

Double your profit potential with the MultiCurrency Sandwich. Leverage investments in top value markets. See Borrow Low Deposit High – How to Use the Multicurrency Sandwich

Turkey for Health

As autumn and winter holidays rush into the present, many people think about eating turkey. This year why not try organic turkey.

Lean organic turkey is a very good source of high density, low fat protein produced without added potentially harmful chemicals. It is a good source of selenium, zinc, niacin, Vitamin E, betacarotene, and Vitamins B6 and B12. Organic turkey allowed access to the outdoors has 21% less total fat, 30% less saturated fat, 28% fewer calories, 50% more vitamin A, and 100% more omega-3 fatty acid than from turkey not allowed outdoor access. Learn more at Organic Valley

Yet good organic turkeys can be hard to get and expensive. Alternatives are free range and kosher turkeys. See

Ecuador is Beautiful

Ecuador’s broad mountains and wide valleys make it easy to gain a bird’s eye view!

Until next message may your international investments not be turkeys!


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

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

November 13 – 15, 2006 – High Andes Tour

December 7 – 14, 2006 – Learn how to learn, retain and process information better + Spanish.

January 5 – 7, 2007 – Inspired Investing beyond Logic.

January 8 – 10, 2007 – Ayurvedic Cleanse.

January 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