Multi currency diversification and investing is needed to take advantage of this opportunity. Investors need multi currency banks or multi currency investment advisers to attain this type of multi currency position.
Yet getting good advisers at a price we can afford has become increasingly difficult. The same governments that create the need for multi currency diversification also hinder our ability to spread wealth beyond their control.
There are numerous reasons why governments do this. Suffice it to say here…this is fact.
Governments in the past used foreign exchange control. Globalization stopped that. Too much money flows across borders that governments cannot control.
Instead governments control their citizen’s wealth in another way now…by regulating banks abroad.
A Swiss bank for example has to comply with US, British, German, Canadian Australian laws, etc. if they accept business from citizens of these countries.
The US is perhaps the most aggressive at imposing this extra territorial jurisdiction…but by know means the only government.
This has been a creeping encroachment on ownership of wealth that has evolved over decades.
One message at this site said:
“Some years ago I wrote about the insidious tactics that the US and other governments have used to erode financial privacy and personal liberty and pointed out that the problem is that the government does not attack the individual but puts the pressure on the overseas financial institutions. The current additional move by the US government to collect tax is just one more small step.”
That message was posted in July 2000. I have been writing about these losses of our financial liberty for decades. This creeping loss of financial freedom is nothing new!
Recently US legal intervention abroad has become so intense, that many good banks will no longer accept US clients. See recent news about this here.
However, smart multi currency investors can still invest abroad if they know what to do. Since I write from experience, as much as I can, rather than research, let’s share what I do.
I mostly use Jyske Bank and London brokers, Smith Williamson, so let’s see what they can do for US and other investors. Then we will look at some other options as well.
Years ago I used 14 banks and brokers spread around the world. This created a lot of confusion, hassle and cost me in banking fees. I began to study the fees and service of each of those banks to whittle the numbers down.
Eventually I eliminated all but these two firms. They gave me the best service I required at what I considered the most reasonable fees.
We’ll look at Smith Williamson and the other options in upcoming messages.
Here we focus on Jyske. I have the bulk of my portfolio there.
First, let’s address the issue of safety. Normally this is a pretty moot point. Right now everyone is concerned. Is a bank safe or not? I like Jyske from a bank safety point of view because there are four bank safety points, from the top down.
Bank Safety Point #1: A recent Yahoo Canada article shows a survey by the World Economic Forum listed five safest countries in which to bank.
So Denmark is a safe place to bank. Now let’s look at Jyske Bank’s safety rating.
Bank Safety Point #2: Jyske Bank is Denmark’s second largest bank.
On October 10 2008, Moody’s affirmed Jyske Bank’s long-term Aa2 rating stable rating. This decision came despite the deteriorated economic prospects in Denmark, particularly in respect of the property market.
Bank Safety Point #3: Also on Friday 10 October 2008, the Danish Parliament passed a bill that secured all deposits and unsecured claims against losses in Danish financial institutions. The rating of the Kingdom of Denmark is Aaa/AAA with Moody’s and Standard & Poor’s respectively.
Bank Safety Point #4: Finally when you invest abroad, most assets you hold are yours, kept in a depository account. These assets would not be lost even if a bank failed.
So what can Jyske Bank do for you?
Here we must divide services…just a bit…between US residents and citizens versus the rest of the world.
Overseas banks,who are not registered with the SEC cannot provide investment advice or buy certain investments for US clients without potentially incurring the wrath of a number of US regulatory agencies.
Jyske overcame this concern by creating a wholly owned, but independent, subsidiary, Jyske Global Asset Management (JGAM) that is registered with the SEC.
Essentially JGAM can do almost the same for US investors that Jyske Bank Private Bank (JBPB) can do for non US clients. There are a couple of quirks in this which we will view in a moment.
First, overall, here is what both JGAM and JBPB can do for non US investors.
#1: Offer savings and current accounts in dozens of currencies.
#2: Buy and sell seasoned bonds in dozens of currencies.
#3: Buys and sell shares in dozens of exchanges around the world.
#4: Buy and sell commodities around the world.
#5: Trade in numerous guaranteed investments.
#6: Lend in dozens of currencies to hedge or leverage investments.
#7: Provide managed or advisory only accounts.
There are some differences between the US and overseas service.
Here is what Jyske Bank Private Banking (JBPB) provides to non US investors.
Non US Clients can open accounts with U$75,000 or more.
Clients with portfolios of less than $150,000 are serviced by the (JBPB) Investment Service Team and are mainly invested in currency accounts and mutual funds. Clients are assigned a personal investment adviser, who tailors the mutual fund portfolio to match the clients wishes, needs and requirements.
JBPB works with six profiles:
Income profile. A low-risk profile, invested in currency accounts (cash) and/or traditional bonds
Stable profile. A low-risk profile, invested in bonds (incl.high-yielding bonds), a smal equity part
Balanced profile. A medium-risk profile, invested in equities and bonds (main emphasis on bonds)
Dynamic profile. A medium-risk profile, invested in equities and bonds (main emphasis on equities)
Growth profile. A high-risk profile, invested mainly in equities and a lesser share in bonds
Aggressive profile. A high-risk profile, invested almost exclusively in equities.
There are six managed strategy funds for investors who want managed services with US$75,000 to US$350,000. These six funds are based on the principles of asset allocation and match the investment profiles above so all investors can attain risk diversification, risk management with even a limited investment.
There is a full Discretionary Portfolio Management service for investors who want managed services with US$350,000 and above. This service is also based on the six strategies above. These strategies are offered in EUR, USD, GBP, DKK and SEK.
Investors, who do not want managed services, and have accounts of US$150,000 or more, can wish to engage in an active have an active dialogue with their adviser and be very involved in the decision-making process. based on the clients investment profile. They can invest in currency accounts in a large number of currencies, all tradeable equities and bonds, mutual funds and commodities.
Here is what JGAM can do for US investors.
JGAM offers its Managed Accounts (Discretionary Portfolio Management) services to U.S. citizens for as little as $50,000. Each investor has a personal portfolio manager who reviews the personal needs, goals, and risk tolerances and helps create an investment strategy.
Then the portfolio manager writes an agreement outlining how you would like your investments managed. After that, the manager fully manages the portfolio and can act independently within the terms established with the investor.
Once again this managed service is not available for non US investors.
Some investors (like me) want to make their own investment decisions. They can choose an advisory account.
Here is a quirk though. Due to investment regulations, JGAM can buy US advisory clients currencies, commodities, seasoned bonds and US registered securities. They cannot buy overseas non US registered shares.
This imposes a small limitation for advisory investors who want to buy overseas shares that are not traded on a US exchange.
However, since there are thousands of ADRs traded on the New York and American stock exchanges as well as NASDAQ this is not a great limitation.
For example, in the Green Portfolio we track there are five shares. Three of them, Vestas Wind Systems, Kurita Water purification and Seche Environment can be purchased as ADRS.
The codes are: Vestas: VWDRTY
There are thousands of these ADRS so the universe is not small.
We just sent out Multi Currency courses subscribers three BUY NOW ADRs to consider now. You can learn about these ADRs when you subscribe to our multi currency course.
Here are the quirks.
Jyske managers can buy overseas shares for US investors who have a managed account. If a US investor has an advisory account then ADRs must be used.
Non US investors can buy overseas shares but cannot have a managed account unless they have $250,000 minimum (versus $50,000 minimum for US investors).
Jyske has spent years and millions in legal fees to comply with the various regulations. Whoever thought government regulations would turn out to be anything but weird? This is how the rules work and keep in mind there are dual government regulations involved. Jyske has to comply with both US, Danish and in some cases a third set of requirements.
Inflation creates a problem for banks…a higher cost of providing good staff. This has forced many banks to raise minimum accounts. Jyske has taken a clever approach and set up graduated levels of service so they can still afford to serve even small investors.
This means that US investors can start an advisory account for as little as $25,000. Non US investors require $75,000.
Few, if any, overseas investment banks have minimums lower than this. Recently one banker was explaining that due diligence regulations now require five hours of account manager time just to open a simple account.
Managed accounts for US investors requires a $50,000 minimum. ($250,000 minimum for non US investors). ($75,000 for non US investors).
Investors who want riskier borrow low – deposit high leverage to create multi currency sandwiches need a minimum of $100,000 invested in an accounts so they can get sufficient diversification.
US accounts of $200,000 receive a premium-level service and accounts exceeding $1 million, receive the highest level of personalized service with the added ability to include hedge funds if desired.
For more details on how to buy multi currency investments at Jyske Bank and Jyske Global Asset Management contact:
US investors contact Thomas Fischer at firstname.lastname@example.org
Non US investors contact Rene Mathys at email@example.com
Protecting purchasing power from inflation will be the concern of most investors in the immediate years ahead. Multi currency diversification will be required. Multi currency banks are important because the global financial bailout creates predictable profit opportunities through multi currency diversification.
Merri and I love our farm in North Carolina…the rich green bursting in spring.
Lush ripeness in the summer.
And colors that burst forth in fall.
But yesterday the winds whispered in this snow this to me…
“Go South”…”Go South”…so soon…
These are the places I’ll be.
In Ecuador in the mountains…in the sun and on the sea.
Join us in the sun at one of our courses in Cotacachi Ecuador or on the beach this winter.
Learn more about economic safety this November. Join Merri, me, Steve, Kjetil Haugan or Thor Anderson of Vistazul and Peter Vestbirk Laub of Jyske Global Asset Management in Cotacachi Ecuador. We’ll review economic conditions, Ecuador real estate, my entire portfolio and investing and business ideas for the months ahead.
Nov 7-9 2008 International Investing and Business Made EZ Ecuador
Feb. 13-15 International Business & Investing Made EZ
See the wonderful balconies in the Primavera condos at for sale at $46,000 in Cotacachi.
Nov 10-11 Imbabura Real Estate tour
Feb. 16-17 Imbabura Real Estate Tour
Then travel to the coast. Enjoy the Vistazul swimming pool on Ecuador’s Pacific.
November 12-15, 2008 Ecuador Coastal Real Estate Tour; Quito Real Estate Tour
Enjoy Ecuador’s music.
Enjoy flowers and beauty.
Enjoy the friendly staff at our hotel.
Better still join us all year in Ecuador! See our schedule of 26 courses, tours, mingos and expeditions we’ll conduct in 2009.