The global economy is in tension. US and Western European economies are both being forced to face up to debt, aging populations and huge unfunded future obligations in pensions, medical care and who knows what, amid a disintegrating, global social cohesion evidenced by terrorism… revolution and internal strife such as the bombing and killing in Norway.
Huge losses will occur as the dollar and euro lose purchasing power.
The best way to protect against these losses is by always seeking value.
Understanding value is the tricky part.
This is why once a quarter we look at a major equity market valuation analysis by Michael Keppler.
If you are a new multi currency subscriber learn about Keppler Asset Management here.
Here are Keppler’s Comments on Major Market Value for this quarter to July 2011.
Recent Developments & Outlook
After a strong first quarter, global equity markets were little changed on balance in the last three months. The Morgan Stanley Capital International (MSCI) World Total Return Index (with net dividends reinvested, December 1969 = 100) finished the second quarter 2011 at LC 2,255 (-0.6 %), $ 3,290 (+0.5 %) and € 1,204 (-1.7 %), respectively.
Year-to-date, the MSCI World Index was up 2.9 % in local currencies and 5.3 % in US dollars. However, due to the strong recovery of the Euro versus the US dollar, it declined 2.6 % year-to-date in Euros. The Euro gained 2.2 % versus the US dollar in the second quarter and finished the first half of the year at 1.4499 USD/EUR — 8.1 % above its year-end 2010 level of 1.3416.
Seven markets advanced in the second quarter 2011, sixteen markets declined and one market was unchanged. Ireland had the highest return (+5.3 %), followed by Germany (+4 %) and New Zealand (+2.8 %). Greece (-18.3 %), Finland (-9.8 %) and Denmark (-8.5 %) performed worst last quarter.
The best performing markets during the last six months were New Zealand (+9.6 %), Ireland (+8.4 %), France and Spain (both up 6.9 %). Finland (-13.1 %), Israel (-11.3 %) and Greece (-11 %) were the worst performing markets in the first half of 2011. Performance is in local currencies, unless mentioned otherwise.
The Top Value Model Portfolio, based on the Top Value Strategy (December 1969 = 100) using national MSCI country indices as hypothetical investment vehicles, finished the second quarter at LC 32,361 (unchanged), $ 31,711 (+2 %) and € 11,605 (-0.2 %). Year-to-date, the Top Value Model Portfolio gained 2.1 % in local currencies, 8.2 % in US dollars and 0.1 % in Euros, underperforming the benchmark by 0.8 percentage points in local currencies but outperforming in US dollars and Euros by 2.9 and 2.7 percentage points, respectively.
There were no changes in our performance ratings last quarter. The Top Value Model Portfolio holds the six “Buy”-rated markets Austria, France, Germany, Italy, Japan and the United Kingdom at equal weights. According to our analyses, a combination of these markets offers the highest expectation of long-term risk-adjusted performance.
Our implicit three-to-five-year projection for the compound annual total return of the Equally-Weighted World Index now stands at 13.1 %, up from 11.9 % three months ago.
JGAM warns about the turmoil in its weekly update and says:
Week 18 July – 22 July
European Monetary Fund
After days of speculations, the financial markets could finally take a sigh of relief when the European leaders last night announced the much anticipated bail-out agreement.
Earlier this week, risky assets carefully started to rebound anxiously awaiting the result, however optimism really took off Thursday as a draft proposal circulated the media.
The positive sentiment continued into Friday as the summit announcement didn’t disappoint expectations.
The European leaders last night agreed on a new EUR 109bn bail-out of Greece, with an additional commitment of EUR 37bn expected from private bondholders.
On top of that the leaders have also agreed to lower the loan costs of Greece, Ireland and Portugal by 100-200 basis points, and to prolong maturing debt and to give the temporary bail-out fund, the European financial facility stability (EFSF) additional powers as well. The bail-out fund will in the future be able to act preemptively by quickly helping countries such as Spain and Italy if needed, an International Monetary Fund (IMF) style ability. The agreement is intended to stop the European debt turmoil and to protect Spain and Italy from any contagion effects.
Since Monday, the European common currency has appreciated with as much as 3% versus the US dollar, and is currently trading in the 1.4325 to 1.4425 range. During the same period, the interest (cost of borrowing) on the Italian 10 year government bond has fallen with 85 basis points from 6% to 5.15%, and by 400 basis points from 17.8% to 13.8% on the similar Greek issuance.
The risk now is whether the new agreement is big enough and/or whether it will follow the same pattern as the previous and eventually disappoint the market.
Fitch, the rating agency, is today warning the market that they will reduce Greece to “restricted default” should the intended prolonging of the maturing Greek debt go ahead as planned.
We expect a bumpy road ahead.
The managers at JGAM responded. On 14 July JGAM’s Investment Committee held its ordinary, monthly meeting and reported .
In the weeks leading up to the meeting we had reduced the overall risk in our portfolios by moving gold and Swiss francs (CHF). This week, the euro crisis has escalated with the downgrading of Portugal and Ireland to junk by Moody`s.
Mr. Silvio Berlusconi, the Prime Minister of Italy, rubbed salt in the open debt wounds, when he called his Finance Minister Mr. Giulio Tremonti an idiot. The open disagreement in the Italian government immediately caused markets to doubt whether Italian austerity measures can be agreed upon.
The growth picture in the US is becoming bleak with rising unemployment and a dreaded double dip, as rare as it is, cannot be ruled out.
China is expected to continue its monetary tightening, which could also dampen growth prospects.
With so much uncertainty, it is no wonder that volatility is increasing, but we believe that our current asset allocation and overall risk reduction through our gold and CHF positions are adequate in a volatile environment.
Due to these risks, we have interviewed Thomas Fischer JGAM Sr. Vice president about multi currency diversification.
Thomas Fischer (right) and Rich Checkan (left).
We also interviewed Rich Checkan of the precious metals dealers Asset Strategies International.
You can also hear both recent interviews on where to invest globally now.
We have added phone interview updates to our Global Personal Portfolio service.
Here is how the updates work.
You email me your questions. We will review them with experts and then answer them in telephone call updates.
We’ll send you the recorded calls.
Who is eligible to ask and to listen in to the call?
This service is free for all subscribers to our annual Multi Currency Service.
Not a Multi Currency subscriber? Learn how to enroll here.
Non Multi Currency subscribers can enroll to have their questions answered for a one time charge of $9.99.
See this Manabi farm with organic cashew potential.
Join Merri and me as we look at ways to fight international investment turmoil in the year ahead.
Last Day of our July Special. The offer to save up to $499 expires tonight at midnight.
We have started a program to help our readers create their own micro business working with these businesses as referrers, dealers and distributors.
What a match… tens of thousands of readers, many wanting to earn globally… meeting some great… really unique global businesses tied together with our communication system that can bring all this: training…. communicating and networking.
We are starting with these five businesses first.
#1: Jyske Global Asset Management (JGAM)
#2: Bio Wash
#3: Candace Newman Essential Oils
#5: Ecuador Imbabura Export Products
After attending our International Business and investing seminar on October 7-8-9, you will be qualified to enroll for referrer, distributor and dealer programs above and any others we develop.
Enrolling in any of our online business development courses and attending one seminar provides full qualification to apply for all programs we provide for a year.
I’ll explain the first specific way you can tap into greater power for everlasting health and wealth in a moment.
First, may I remind you of our July special that ends in just over two days?
We provide three e-courses that can help you develop your own micro business that we designed to help you earn anywhere you live in the world.
Enroll before midnight July 24, 2011 for our October International Business & Investing Seminar (plus Frequency Modulation Workshop), October 7, 8, 9, 2010 in the Blue Ridge Mountains of NC and choose any one of the three courses above for FREE. You Save between $299 and $499.
Early enrollment for our October 7-9 North Carolina Course click here for details.
We have started the beta program, and the good news is that we are not charging a penny more more. Our International Business Made EZ online course and our International Business Made EZ seminars remain the same price though we’ll now offer subscribers an entrance to doing business with many turnkey businesses.
The overall service can bring you the following benefits:
#1: Connect you via our our online course “International Business Made EZ” to here and now specific business opportunities.
#2: Keep you in touch with other readers in the program, share business tips, ideas contacts and even website support in some instances.
Our first turnkey business program is Jyske global Asset Management because our activities as publishers has a synchronicity with Jyske and JGAM. We have been able to combine our training, communications and lead generation abilities with their financial organization.
Business is always a little more complicated when it entails financial products so we have created a beta program to develop this system.
A referrer does not have to be a registered as an investment adviser but JGAM does have a due diligence requirement. JGAM will also expect a certain amount of referrals per year though this amount has not been determined… hence this beta offer.
JGAM pays a percentage of their fee to the referrer up to a maximum 25% of their fee. This not only offers an excellent income generating opportunity but creates a potential long term income stream because JGAM keeps paying the fee as long as the client remains a client. Fees are paid on a quarterly basis.
There is also potential for growing long term income because JGAM pays the referrer based on the total assets under management. If a referred client makes additional payments, the referrer will be paid on the total amount.
For example if an referrer refers a client who invests a minimum $100,000 and the annual fee is 2%, the referrer earns $500 per annum basic fee (as long as the customer remains with JGAM)… plus if the assets grow either through portfolio growth or added deposits… so too does the referrer’s fee.
We have set our first training JGAM training session for October 10, 2012.
This program will allow subscribers to any of our online courses who have attended an International Business Made EZ seminar to become referrers for JGAM.
We have been working with Jyske Bank for over 20 years and Jyske Global Asset Management, a Jyske Bank wholly owned subsidiary. We started talking to Thomas Fischer Senior VP about an referral program for some time. Finally,we introduced this opportunity for the first time at our June 2011 seminar. The response was overwhelming.
Jyske Bank employs a staff of about 4,000 and operates 116 Danish branches, which makes it the second largest independent Danish bank. They offer a full range of financial solutions to retail as well as small and medium-sized corporate clients.
We have always liked Jyske because they are one of Europe’s largest currency traders and offer very simple but sophisticated multi currency investing services. They are one of Europe’s largest currency traders and dealers.
We have especially enjoyed our business relation with Jyske because being open and honest is one of the core values of the bank group. Traditionally, Jyske formulates and communicates its values – and the way they understand and live by them – to the surrounding world. They work hard offering shareholders, customers and employees balanced opportunity.
We especially like the fact that Jyske employees are not paid bonuses. No multi million pay outs are in the system that might temp staff to distort earnings or take undue risks.
Here is how you can apply for this program.
To start as a referrer, there is first the compliance process with Jyske Bank.
Once that process is complete, our IBEZ system helps educate and assist referrer.
First… once a referrer has been approved by JGAM, and the referrer has completed our online course International Business Made EZ course and attended one of our international investing and business seminars they can attend an exclusive training seminar at our farm.
We have a…
seminar hall where…
unless the group grows too large, we’ll meet. We’ll have lunch on the deck looking over Little Horse Creek.
JGAM and our company conduct this one day intensive training for agents the day after each International Investing and Business seminar.
The first such seminar will be conducted Monday, October 10, 2011 immediately after our October 7-8-9 International Investing and Business Seminar in West Jefferson, North Carolina.
Part of the JGAM program is designed so we can assist referrers by referring readers in their locale to them. So for example if a referrer is in Miami, we will send special emails to our readers in that area, help organize mini seminars… etc.
We can zero in as close as 20 miles to a location so for example we can send a separate email to every reader within 20 miles of the address of a referrer. And although we won’t release the names in that area, we can send them a note of the opportunity.
We will also provide a referrer communication forum and update training as well as portfolio and investing ideas. We have general plans at this stage but find the best way to develop systems is to refine through action. We expect our beta program this year to clarify how we can best help our readers become referrers and how we can help them succeed.
Step one is to start the compliance process with JGAM. Thomas Fischer can send you the Introducer Questionnaire and Terms of Business.
Thomas Fischer’s email is firstname.lastname@example.org
This will begin the process of establishing a relationship with JGAM. Once this relation is approved and verified, then you will be able to enroll in the referrer training.
You must complete one of the online business development courses above and attend an International Business and Investing Seminar to be eligible for the October training.
All of our readers are invited to enroll in our International Business Made EZ Online Course and our International Business and Investing Seminar at any time.
Satisfaction Guaranteed. Three Guarantees.
There is no guarantee that JGAM will approve your application as a referrer just because you enroll in the seminar or take the online course so we make two special guarantees.
First Guarantee. Regarding the online course International Business Made EZ. Enroll in this course. Take it and if you are not satisfied for any reason within 30 days… let us know and we’ll give you a full refund.
Second Guarantee. Enroll in our October 7-8-9 International Business & Investing Seminar. I’ll send you a recording of the June seminar now so you better understand what these seminars are and how they help you. If you are not happy with what you hear, let us know within 30 days and we’ll give you a full refund. You keep the recorded seminar as our thanks.
Third Guarantee. Your earnings potential has this guarantee. First, any time between now and October… before you attend the International Business and Investing seminar if you fail to qualify as a JGAM referrer agent or change your mind before attending the International Business and Investing seminar you can ask for a full refund.
Early enrollment for our October 7-9 North Carolina Course click here for details.