The performance of these six portfolios provide several lessons.
Lesson #1 is the power of leverage…up and down.
$100,000 invested in each is now worth:
Danish Pharmaceutical $ 4,519.94
Emerging Market $ 47,797.86
Infrastructure $ 17,939.80
Blue Chip $ 41,567.38
Green $ 54,389.17
Non leveraged $ 75,612.03
Without leverage the portfolios would be worth:
$100,000 invested in each would be worth approximately:
Danish Pharmaceutical $ 68,175
Emerging Market $ 82,600
Infrastructure $ 72,647
Blue Chip $ 80,523
Green $ 84,797
Non leveraged $ 75,612
The Morgan Stanley World Stock Index is down 21.82% in the last 12 months so
a $100,000 investment in the index would be worth $78,180.
In other words three of the portfolios without leverage have outperformed the index. Everyone loves leverage when markets are rising but let these numbers be a reminder of the downside.
Lesson #2: Major productivity waves are still better even in the worst down times. The Green and Emerging Market portfolios are down much less than the Danish Pharmaceutical.
To me the green and emerging markets represent the new era of productivity ahead. Pharmaceuticals are old school, an industry that requires radical reform.
The third lesson comes from reader questions below.
Please send me your questions. this is an era of huge and it is often hard t keep up. My goal is to help you understand these markets.
Yesterday’s update that introduced JGAM’s new advisory service confused many American readers about the services that Jyske Bank now offers. One reader wrote:
Hi Gary. Jyske Bank and I must have had a major miscommunication. I had about $150K with them (before leverage) and was told it could only be kept in a managed JGAM Account. So, I pulled my account and am in the process of investing it elsewhere. I wanted an advisory service, but I swear that amy advisor told me that was not possible. I’d be curious to know what went wrong.
JGAM started with just managed service but is continually evolving their services as they thread their way through the legal mine fields of complying with both US and Danish law. They knew that many investors needed an advisory service so have worked hard so they can now offer this.
American investors with questions should contact Thomas Fischer
Senior Vice President
Jyske Global Asset Management
Tel. +45 89 89 59 03
Fax +45 89 89 59 01
Canadian readers were equally confused by my missive. One wrote:
Hi Gary, I just signed up for your courses as I’m interested in the “old” way you have invested in multicurrency portfolios (I am Canadian by the way, living in Canada). Are you going to continue doing this for your non-US subscribers? I really have absolutely no interest in participating in Jyske’s glogal asset management or opening an account with a UK broker for execution only services as being Canadian, I believe I can still follow your “old” way of investing as opposed to this new managed/advisory stuff. Could you please let me know?
Yes. We and Jyske will carry on as before for non US readers.
Non US readers should contact
Non Americans should contact Mr. Rene Mathys
Tel: +45 8989 6232
Fax: +45 898 6194
Some subscribers are still confused about the purpose of the portfolios we track.
One readers wrote:
Gary, As I look at your info on multi currency investing you state that
you have been investing for decades but only provide two years
worth of data. Do you have any annual data for the past 10 or 20
years? I assume you are telling me that your method is better than the Templeton International Fund.
We started this course two years ago so there would be a way to track
various types of portfolios. There was no such standard previously.
The goal of our multi currency course is aimed at helping readers understand the dynamics of multi currency investing so it is easier for them to diversify globally in a way that is best for them and their particular circumstances.
Our mission is to share our 40 years of experience, our continuing daily research and the contacts we have accumulated.
One part of our multi currency study are five portfolios we develop with Jyske Bank each year. We form the portfolios to use as case studies and track and analyze their performance for a year.
We also study the State Street Global Advantage portfolios that use Michael Keppler’s good value analysis and are managed State Street Asset managers.
We use my own personal portfolio as a case study as well.
We have recently added case studies of “CurrencyShares” exchange traded stocks managed by Rydex Investments and traded on the New York stock exchange.
We do not have a particular method.
We study many.
None of the stocks or portfolios are recommendations for any one reader.
The portfolios above that we develop with Jyske for example are for study. They remain static for a year. This is not necessarily what you should do in your portfolio. Certainly if you had an account with Jyske Bank (or anywhere) your manager wuld have advised defensive action this last year.
My portfolio also should not be your portfolio.
The Global Advantage portfolios may or may not fit any one reader’s needs.
The “CurrencyShares” stock will also work for just some investors.
However we can learn by studying them all!
Every investor has an individual situation. Our course studies these many types of portfolios so we can all learn and then adapt the lessons we gain together to our unique, individual circumstances.
To make it easier to act on the education we gain, I work closely with established banks and brokers (Jyske Bank is one because this is the bank I have personally used for 20 years) that I have known and used for years. I recommend these firms but am not paid by them for the recommendation. I make no claim that these institutions are better than any other for any particular reader. Your unique circumstances may make another bank or broker better to use.
I invest in a way that suits my needs based on 40 years of global investing. I use banks and brokers that provide a service suited to my needs.
Every investor should determine if any of the contacts I use suits their needs.
The ideas that I do believe affect most investors are:
#1: Most investors need to diversify globally.
#2: Most investors should diversify with major well established firms.
#3: Most investors should have some idea about the fundamentals of multi currency investing (hence our initial report “Borrow Low Deposit High”)
#4: Most investors should have an idea of what is currently happening in global financial, currency and business markets. (hence our regular updates and case studies).
#5: Most investors should combine the knowledge they gain with that of a professional investment advisor to help them create a portfolio that suits their individual financial needs.
#6: Most investors should understand the benefits and risk of leverage in their portfolios.
#7: Most investors should never risk more (via leverage) than they can afford to lose.
Until next message good global investing to you.