International investments use Czech loans can enhance investing profits. Many readers have been reporting great success with these types of portfolios. One reader just sent this note.
“I want you to know that although I did not follow your exact advice, I made some Asian investments, and took out a Czech Coruna loan some months ago. The statement from Jyske came yesterday. As with every month, it is up substantially over the previous month.”
Yet yesterday's message showed that I liquidated all my equity mutual fund international investments last week.
This does not mean you should liquidate all your international investments now. There may be plenty of steam in emerging equity markets and you'll want to shoot me if you follow my lead and these markets move on to new highs.
Our decision to unload the equity portion of our international investments related to several thoughts. I shared five of these yesterday but would like to look at them again and share two more reasons for our sudden sale.
#1 International Investments Concern: Our review of Keppler's emerging market valuations notes that emerging markets have outperformed major markets for six year's in a row.
#2 International Investments Concern: We learned from tracking our multi-currency portfolios last year that emerging markets were subject sudden corrections. Since then risk aversion has diminished and so the next correction could be even more sudden.
#3 International Investments Concern: Most of the funds we held that have done so well are now in markets that Keppler rates as neutral or low value.
#4 International Investments Concern: Most of the equity regions (i.e. Latin America, Asia, Europe are in Phase 4 of their bell curve (top of the bubble).
To review the four phases go to garyscott.com/international_investments/international_investments_85.html
#5 International Investments Concern: MOST IMPORTANT! We are making other investments that lead us to becoming more risk adverse in our liquid portfolio.
#6 International Investments Concern: Merri and I believe strongly that we should do as much social good as we can via business and investing. This normally goes hand in hand with profit. Do real social good and you generally profit as well. Thus we have liked the idea of investing in emerging markets. However we are not really share investors…too much we do not understand. We have to rely too much on others. We like to invest in ideas we believe in and that we feel comfortable with. This means real estate. New real estate opportunities that bring us profit and help Ecuador have appeared. Shifting from the equities to more property works better for us.
#7 International Investments Concern: There us a seventh reason called Rahu. Explaining this may help many who have asked how we use Vedic Astrology in our investing and business understand. Here is one of the ways.
***Our International Investments Concern RAHU SELL OFF***
Vedic Astrology first helps us understand areas where we do best. Not surprisingly both Merri and I both have lop sided charts that suggests we do well in publishing, communication, economics, gas and oil, exotic countries, long flights over water and real estate. So we always keep a special eye on these areas for opportunity.
This is the first way we use Astrology…just to keep a keen focus. We do just a few things and try to do them well. This alone is pretty valuable because there are so many opportunities in the world that it's easy to be drawn away from one's focus.
The second Vedic astrological help we use is an annual progression which looks at how we might be feeling and how events might unfold in the year ahead for us. For example last August 11, 2006 I began a Rahu Rahu sub cycle. About this time our equity portfolio began to shoot up amazingly. This Rahu Rahu cycle lasted through January 14, 2007.
During this time I kept a special eye on this sub cycle because Rahu is the gambler and the Lord of illusion. He brings wonderful, unexpected profits. Yet what Rahu gives, Rahu also takes away. Thus our astrologer, Blaine Watson, always suggests we look for special, almost too good to be true opportunity in Rahu cycles. But he also warns to convert these profits and convert them into something else. As Rahu is the great transformer, it is always better to choose how he transforms instead of letting him choose!
Merri and I have enjoyed extraordinary profit in our share portfolio since we moved into this double Rahu cycle. I was being extra cautious around January 14, the end of that cycle. On January 11, one of the financial advisors I track wrote: “The Asian markets were subject to a strong correction overnight. This may be an omen that a somewhat major correction is about to take place in the equity markets. We have seen pronounced increases over the past six months or so. Therefore there may be good reasons to take profit after the recent months' fantastically good returns.”
This was enough convergence for me. Keppler gave me a warning. My astrologer had advised me to shift profits. An important financial advisor, coming from seemingly opposite ends of the spectrum, said almost the same thing. Plus new opportunity in an area that almost always does well for us emerged.
This blend of events all come together on the week of January 11, the dates that Blaine had advised me to pay extra attention. One of the hardest things for an investor to do is sell off investments that have been rising like crazy. Astrology is just one extra clue that Merri and I use to know it's time for us to go while the getting is good.
Blain Watson will join us for our upcoming Import-Export course and will be available to do a few readings plus will conduct a session on how to enhance business with Vedic astrology.
*** International Investments Concern CZECH LOAN CAUTIONS ***
Only time will tell how close I liquidated from the top. My decision that it was right for Merri and me to exit the markets does not mean that your equity portfolio will not work well for you.
However, there are a growing number of analysts who are voicing concerns about the risks that come from growing risks of economic volatility and growing numbers of investors who are now using leverage (called carry trades) in their portfolios.
A recent Merrill Lynch article revolved around the work that some of their analysts had done on carry trades. They answered several questions about carry trades and expressed a conviction that conditions are in place for carry trades to unwind and that these risks are underappreciated in the currency markets.
They fear borrowing yen but feel that Swiss loans could be okay because Switzerland’s balance of payments suggests capital exports will weigh the Swiss franc down.
The main currencies that have been borrowed for Multi-Currency portfolios over the past decade have been the Japanese yen, the Swiss franc. Recently the Czech koruna has also been making sense.
The first risk in these leveraged portfolios is that the parity of the currency will rise versus the invested currencies. The second risk is that the interest rate of the borrowed currency will rise. The third risk is that the value of the investments made with the loan will fall. Those who are borrowing to invest in emerging markets should take special care at this time. STAY ON TOP OF YOUR PORTFOLIOS.
You can track our five multi-currency portfolios with us. Learn why we have chosen these portfolios in a sixteen page email report about how 13 economic forces that may well shape investment markets this year.
Here is how these portfolios have performed so far since November 2006.
|TOTAL APPRECIATION TO DATE|
|Portfolio||Dec. 22||Dec. 29||Jan.11||Jan 22|
Learn how to get the report free at https://www.garyascott.com/catalog/bldh
Until next message, may your international investments go well!
Join us in the Ecuador sun this winter. Here is a schedule of the courses Merri and I will sponsor and or conduct.
Feb. 20 – 25, Tues.-Sun. Import-Export Course.
Mar. 9 – 15, Fri.-Thurs. Expanded Super Thinking + Spanish.
Mar. 16 -18, Fri.-Sun. International Business and Investing Made EZ.
Mar. 19 – 21, Mon.-Wed. Andes Extension & Real Estate Tour.