Multi Currency Tip: Sell Australia & Brazil

by | Sep 26, 2011 | Archives

JGAM has advised me to sell Australian dollars and Brazilian real.

I have four logical investment advisers and three who give me out of the box information.   Two of the four logical advisers (Thomas Fischer and Anders Neilsen) work at Jyske Global Asset Management (JGAM), so when JGAM sends me advice… I doubly listen.


Gary Scott with Thomas Fischer and Anders Neilsen

See a warning they sent me Friday and an excerpt from the Multi Currency Report I’ll send our Personal Portfolio readers this week…. outlining when to follow such advice…  explaining why I won’t now… but that many reader should.

JGAM sent me this note on Friday:  On 22 September, JGAM’s Investment Committee held an ad hoc meeting deciding to sell bonds denominated in Australian dollar (AUD) and Brazilian real (BRL). These trades have now been carried out. We sold the AUD bond with a nice profit and the BRL bond only gave us a small loss.

We took the decision to sell the bonds because of the increasing nervousness in the financial markets sparking a flight to safety in US dollar denominated Treasury bonds. We know from past experience in 2008 and 2009 that when investors run for safety then AUD and BRL can take a severe hit. Therefore, we decided to cash in and protect the funds you have entrusted with us.

Learn more from Thoams Fischer at JGAM

Here is an excerpt from the password Multi Currency Portfolio Update I’ll be sending out to our Multi Currency Portfolio subscribers.

Learn how to subscribe to our multi currency portfolio service.

The excerpt begins here.

The editor of a successful investment publication recently sent me this note:

Hi Gary, I hope all is well. We miss you guys and hope to see you soon but we know you have lots of irons in the fire..and new grandkids, etc. — so congrats!!

Just a quick question if you don’t mind — you’re always the guy I turn to with worries and I apologize for that –but how do you feel about Jyske Bank and its program in light of what’s happening in the currency markets?

My reply can provide a quick update of how I am diversifying right now.

We hope you two are well also.  All’s good here.  Busy but enjoying the Blue Ridge autumn.

We have our holdings at Jyske and our broker in London and feel comfortable with that.  Keep in mind all bonds and shares are held for your acct. so are your assets not the bank’s, plus accts are guaranteed by Danish and British Gvts. who are still both AAA.

We have greatly reduced the leverage (we were short US dollars) down to a very small amount. This reduces profit but also reduces risk.

We also are using cash in accounts to buy more real estate… currently have a four bedroom house in Lakeland, Florida under offer we’ll use as a rental.

Plus we have rentals here in the Blue Ridge as well as Cotacachi and San Clemente.

Here is our portfolio at JYSKE this time so you can see how we have spread out.

    Type          Int.    Rate    % of portfolio

Savings US  $  0.125%    5%    Currency
Savings EUR    0.125%    1%     Euro
Savings Pounds          2%     GBP


Jyske Invest Turkey     2%     Lira
JI European Equity    5%     Euro
Suntec Reit           2%     SGD
Hyflux Water            2%     SGD
Jyske Bank shares       4%     DKK
KGHM Polska Miedz (Copper Silver) 5%   PLN
Brookfield Renewable Power  5% CAD
Unicredit Itakian Bank  3%     Euro
Axel Springer AG German Publisher  Euro 2%
Sky Deutschland AG German TV   Euro 2%
Silver Wheaton Corporation Silver  5% US$

Ishares Maci Latin Amer 5%     Mixed Latin
JI Emerging Local Bonds 4%     Mixed
JI Emergin Market Bonds    3%     Mixed
Mexican Bonos    MxnGvt  2%     MXN    Rate 8.000%   Mature 19.12.2013
Bond    Bombardier Inc.    2%     Can$        7.250%      15.11.2016
Bond    Rabobank, Nederland 4% NOK         4.000%      29.05.2013
Bond European Investment 5%    AUD         6.000%          14.08.2013
Bond Kreditanstalt Für     5%    CAD         4.950%      14.10.2014
Bond European Ivtment BK 5%    NZD         6.500%          10.09.2014
Euro Invment BK Turkey   3%    TRY        10.000%      28.01.2011
Euro Investment BK Brazil3%    BRL        11.125%          14.02.2013
Bond Brazil GVT            3%    BRL        12.500%      05.01.2016
Bond Brazil GVT            3%    BRL        12.500%      05.01.2016
Bond Euro Invment BK    3%    AUD         6.000%      14.08.2013
Bond Kreditanstalt Für   2%    NZD         6.250%      15.04.2013
Bond Euro Invment BK    3%    PLN         6.500%      12.08.2014
Bond Mexican Fixed Rate    3%    MXN         8.000%      17.12.2015

Loan                    -3%    USD     Interest rate 2.5%

End of excerpt.

Timing and strategy are the keys to long term multi currency investing so selling Australian dollars and Brazilian real will depend on  your timing, your strategy and when you bought and what you paid.. plus your current economic and investing position.

Take this advice and fit the data into your picture and consider the benefits of selling Australian dollars and Brazilian real.  Review this and your position with a financial planner because there is an added risk that for some time the Australian dollar and Brazilian real will fall.