International investments add stability to wealth and investments plus reduce the loss of purchasing power created by a falling currencies. Diversified international investments in many currencies provides investment safety and growth opportunity for increased profit in your investments. International investments make sense because global investing and business are part of a natural economic evolution. International investments have outperformed US investments for years.
Here’s a nice thought about international investments to end the year. Gain more profits from the dollar on steroids.
Our last message that looked at multi currency international investments shared how the greenback is on Asian created steroids and how this may strengthen the dollar short term, but is good news for those who wish to take advantage of the greenback’s long term fall.
Now our latest International Multi Currency Portfolio Update shows how a stronger greenback and the Japanese yen’s fall is already creating extra multi currency profits.
Here is the performance of the five international investment portfolios we (along with Jyske Bank) created and have tracked from November 1, 2006. The performance of all has been good and some great. Suddenly last week the international investment profits jumped dramatically.
|Two Month Appreciation||One Week Later|
|Swiss Samba||+ 3.18%||+ 8.10%|
|Dollar Neutral||+ 5.09%||+ 7.94%|
|Emerging Market||+ 5.91%||+ 15.11%|
|Dollar Short||+ 11.74%||+ 12.91%|
|Green||+ 27.70%||+ 34.77%|
“Why”, I ask…”did some of these portfolios jump so much in just a week”? When performance erupts upwards at such a rapid pace, without apparent reason, I become nervous. I like to know why I am making better than average profits. If I cannot see why, my concern grows that something may be out of balance.
One reason for the sudden increase is a US dollar bounce mentioned in our last message. The falling US dollar had been weakening performance of the Swiss Samba portfolio. The Samba portfolio is leveraged with a Swiss franc loan and investments in Latin America are linked to the greenback. So as the dollar fell versus the franc it dragged down performance (even though 3.18% in two months is not bad). Now the suddenly stronger dollar has helped those Latin investments explode plus reduced the cost of the Swiss franc loan (in US dollar terms). This popped performance up nearly 5% in a week!
The Green portfolio gained from the stronger dollar but in a different way. This portfolio is leveraged with a loan in Japanese yen which (as pointed out in the last message) has weakened. You can see the effect on the dollar’s strengthening in how the loan costs actually dropped in a number of portfolios last week.
|Samba||$ 154,853||$ 153,947|
US $ Neutral
|$ 204,946||$ 204,149|
|$ 104,882||$ 105,903|
US Dollar Short
|$ 202,215||$ 202,215|
However the Emerging Market Portfolio rose like a rocket ship from up + 5.91% to + 15.11% despite the fact that its Czech koruna loan actually costs more due to a strengthening koruna.
This growth comes from big appreciation in the Jyske Chinese and Eastern European Equity funds held in that portfolio.
You can see this performance in the Emerging Market Portfolio which invested $100,000 and borrowed $100,000 in Japanese yen to bring the total portfolio to $200,000.
|Investment||Value Nov 1, 2006||Value Dec 29, 2006|
|JI Chinese Equity Fund 223.90||$50,000.00||$58,195.62|
|JI Eastern European Equity Fund||$50,000.00||$56,576.73|
|JI Indian Equity Fund 271.50||$50,000.00||$52,320.44|
|JI Far East Equity Fund 383.20||$30,000.00||$32,740.08|
|JI Turkish Equity Fund 89.20||$20,000.00||$21,184.83|
It is nice to see such wonderful profit…but in times of such explosive appreciation we need to also take care. Let’s not forget the ups and downs of the Asian Emerging Market Portfolio we tracked for 2006. That portfolio rose + 75.19% from November 2005 to March 2006. Then the second worst emerging market plunge of the decade began. The portfolio dropped – 44.91% from April till August before finally recovering to end with a +114.16% return. This is why we remind you again and again never invest more than we can afford to lose.
I have written a sixteen page email report about how 13 economic forces now clash to shape investments markets ahead that shows the rewards and the risks. The report also outlines the five new Multi-Currency Portfolios including the Green Portfolio we are tracking in our Borrow Low- Deposit High Multi-Currency Sandwich Educational Service. You get this report FREE when you enroll in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service.
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