Speculation comes when one bets on a currency rising or falling against some other currency. Most US investors (who live pretty much on imported products) are speculating on the US dollar, if that is the only currency they hold.
This is a blind speculation because they do not see the other currencies they spend. They buy their Toshiba computer with greenbacks rather than yen, their German Mercedes with the buck instead of the euro. They dress in Malaysian and Burmese clothing, eat Danish ham, Swiss cheese, drink Colombian coffee while sitting in furniture manufactured in China . Even if they drive a Chrysler mini van they are probably spending Canadian dollars!
And over the last 38 years, these speculators have been wrong.
The US dollar has fallen dramatically since 1969. In 1969 a dollar bought 4.25 Swiss francs and 390 Japanese yen. It has declined 72% versus these currencies since.
But if the dollar cannot be trusted, where can one go without being an active currency trader?
Our multi-currency portfolios are a way of diversifying long term into the global economy. They do not involve trading but are aimed at a five year horizon.
Look, for example, at investments in the dollar neutral portfolio.
|10.00%||AUD||5.00% BK Nederlandse Gemeenten 16.07.10|
|4.00%||BRL||12.50% Brazil Rep. of 05.01.16|
|10.00%||GBP||6.37% Rabobank Nederland 20.03.09|
|5.00%||HUF||6.50% Hungary Gov. 12.08.08|
|4.00%||ISK||9.50% Iceland 13.06.2008|
|5.00%||MXN||9.00% Mexican Bonos 22.12.2011|
|6.00%||NZD||6.00% KFW 15.07.2009|
|4.00%||TRY||10.25% KFW 09.02.2008|
|5.00%||USD||3.87% Deutsche Telekom 22.07.08|
|5.00%||USD||5.45% Hutchison 24.11.10|
|7.00%||USD||7.20% Porsche Intl. 01.02.2049|
|5.00%||EUR||JI Favourite Fund|
|5.00%||EUR||JI German Equity Fund|
|5.00%||EUR||JI High Yield Corporate Bond Fund|
|5.00%||JPY||JI Japanese Equity Fund|
|5.00%||USD||JI International Equity Fund|
|10.00%||USD||JI Emerging Markets Bond Fund USD|
This portfolio is a highly diversified blend of currencies and balanced in major and emerging markets as well as equities and bonds.
This is a highly stable portfolio. If one desires it does not have to be leveraged.
However in our case we have leveraged this portfolio two times. We invested $100,000 and borrowed $40,000 in Japanese yen at 1.88% $100,000 in Swiss francs at 3.13%, $30,000 in euro at 4.5% and $30,000 in Czech koruna at 3.88%.
Even the loan has reduced risk as it is totally invested in bonds of linked currencies that pay higher returns.
So far this philosophy has paid off. This very safe investment, held at one of the safest banks in the world’s safest countries to bank (Jyske Bank) has risen from $100,000 invested to $132,920, a rise of 32.92% in seven months.
Here is the latest review of the five non US dollar multi-currency portfolio’s were have tracked since November 1, 2006 (seven months).
|Portfolios||Dec 29||Jan 30||Feb 26||Mar 27||Apr 30||May 11||June 8|
We update and analysis these five portfolios at our next two International Investing and Business Made EZ courses.
Join us September 14 – 16, 2007 in North Carolina , https://www.garyascott.com/nccourse
Or come to Ecuador November 9-11. See https://www.garyascott.com/catalog/IBEZec/
You can learn why this performance has taken place in a sixteen page email report about how 13 economic forces now clash to shape investments markets ahead that show the rewards and the risks. The report also outlines the five new Multi-Currency Portfolios we are tracking in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service. Details are at https://www.garyascott.com/catalog/bldh
However there is a time when the US dollar may rise. We will see why and when in tomorrow’s message.
Until then, good investing.
Anther ultimate protection is your own global international business so you can earn income anywhere, in any currency. Our readers who visit Ecuador to learn import export continue to have success.
One reader who attended our course decided to buy a new form of Ecuadorian art that incorporates handmade high rag natural fiber paper and a heavy metallic type medium that was painted into ancient sacred geometrical designs. They weren’t even thinking much about selling. They just bought what they loved…until…..everone they met went wild and wanted one…or two…or more.
They were inspired and came up with the idea to start a line of this art that has ancient Reiki symbols. Again every thing that came in went right back out the door…with nice markups.
This time they asked the artist to symbolize an ancient Andean prophesy that a time would come when the Eagle of the North and the Condor of the South would fly in the skies together to help restore the equilibrium of mankind.
Here is one of these pieces that now sits in our home here in North Carolina .
Here is our schedule of Ecuadorian courses for the balance of 2007.
July 17 – July 22, Tues. – Sun. Import-Export Course.
Sept. 26 – 30, Weds. – Sun. Condensed Super Thinking + Spanish with Free Oct 1 – Mon. Andes Extension & Real Estate Tour.
Nov. 9 – 11, Fri. – Sun. International Business & Investing Made EZ.
Nov. 12 – 14, Mon. – Weds. Andes Extension & Real Estate Tour.
Nov. 16 – 18, Fri. – Sun. Andean Shamanic Tour.