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July 30, 2010
Alert 58-2
SWITCH DOLLARS INTO WHAT CURRENCY?
In Tuesday’s alert, I repeated advice that’s become our mantra here at Asset Strategies International: Don’t keep all of your assets in one country, one currency, or one investment.
That’s easy to say. But as many of you have written us, it’s not so easy to do. To say that there are a plethora of confusing choices out there is an understatement. How do you decide which one is best for you?
In today’s column, I have some recommendations I hope will help you. My first is what not to do. Don’t believe anyone who promises to achieve impossible results. There are a lot of hypesters and hucksters out there; take everything you hear with several giant grains of salt.
And if anyone tells you that “it’s okay, we know how to get around the law,” run, don’t walk, to the nearest exit. If you don’t lose everything to the U.S. taxmen, you’ll almost surely lose it to the conmen who make such a promise.
In short, be careful. Do your due diligence. Remember, no one cares as much about your money as you do.
That being said, I want to assure you that there are professional advisors and money managers you can trust. Over the years, we’ve dealt with many of them. We’ve met numerous asset managers, private bankers, and other financial experts. We’ve checked out their performance (sometimes with our own money). We’ve seen how they treat their clients. We’ve learned which ones are reliable and which ones are, in that inimitable phrase from Texas, “all hat and no cattle.”
To get an expert’s advice for today’s column I called on someone we’ve mentioned before in these pages. Thomas Fisher is the senior vice president of Jyske Global Asset Management, headquartered in Copenhagen, Denmark. JGAM, as it is known, is the wholly owned subsidiary of Jyske Bank, the eighth strongest bank in Europe.
JGAM not only welcomes Americans as clients – it has paid all the fees, passed all the tests, and done all the work necessary to be a registered investment advisor in the United States. Yes, while many banks in Switzerland and elsewhere in Europe have told their American clients to take a hike, JGAM did the opposite: They made a substantial investment in time and money so they could serve an American clientele.
As anyone who’s become a client of JGAM will tell you, they serve those clients very well indeed. JGAM offers a full array of asset-management services. But they have also developed some unique products for their clients. The one I want to mention today is their managed account in foreign currencies.
JGAM introduced its Managed Foreign Exchange Portfolio in June 2010. Participants were encouraged to select their level of risk. Choices ranged from 1X leverage (where an account could borrow up to 100% of the initial deposit) to 4X leverage (obviously, a highly speculative decision).
Here are the first three trades Thomas and his colleagues made in this portfolio:
Short EUR/Long CHF. That is, they sold the Euro and bought Swiss francs. As Thomas explained, “We believe that the Swiss National Bank will allow the franc to appreciate, due to an improving economy and increasing inflationary pressure.”
Short USD/Long MXN. In this trade, they sold dollars and bought the Mexican peso. “We believe that an improving U.S. economy will be a positive for Mexico,” Thomas said.
Short USD/Long SGD. JGAM sold U.S. dollars and bought Singapore dollars, in the expectation that the Chinese government will allow the renminbi to appreciate. Direct plays in the Chinese currency are difficult and expensive; the Singapore dollar is a good proxy for it.
One month later, JGAM took their first profits, closing the EUR/CHF trade for a gain of 4.90%. They invested those funds in a short USD/long NOK (the Norwegian kroner) trade.
Thomas told me, “We are not ‘pip hunters.’ That is, we don’t believe in day trading; instead we take a longer-term view.” Thomas has more than 20 years experience trading currencies; if you want an expert to guide and advice you, I can’t imagine anyone better. JGAM requires a minimum investment of $100,000 to participate in their Managed FX accounts; if you’d like to receive application forms, just click here.
Before saying goodbye, Thomas asked me to mention one more thing. JGAM is hosting a four-day conference at their headquarters in Copenhagen in late August. “We have a group of world-class speakers, including Kenneth Rogoff, Harvard professor of economics; Peter Berezin, managing editor for BCA Research; Jeff Rubin, economist and author; Jim Ellert, professor of finance; and Gary Scott, who has been writing about ‘currency sandwiches’ for more than 20 years.”
For more information about what will surely be an outstanding affair, just click here. By the way, I will also be attending the JGAM conference; it would be a great pleasure to meet with any ASI readers who attend.
Thomas is offering ASI readers a 10% discount to attend this conference. When you register, make sure to note in the comment box “10% discount offered by ASI and Thomas Fischer.”
If the idea of trading U.S. dollars for foreign currencies appeals to you, but you’re not prepared to join something like JGAM’s Managed FX portfolio, here’s a simple suggestion: Call ASI and tell us you want to buy some foreign currency. We can supply you with all of the Euros, Swiss francs, Mexican pesos, or Norwegian kroner that you want – at very reasonable exchange rates. ASI’s minimum currency transaction is $5,000. Then put your FX funds somewhere safe.
Oh, and don’t forget our neighbor to the north: Many experts believe that the Canadian dollar (known as the loonie) will fare very well against the dollar, thanks to their stable economy, minimum debt, and strong resource base.
We at ASI would be glad to help you find a bank in Europe to open a bank account. The procedures are surprisingly simple. And once you have such an account, it’s relatively quick and easy to convert dollars to the currency (or currencies) of your choice. If this idea appeals to you, click here for more information.
Until next time, please remember our advice: Don’t keep all of your assets in one country, one currency, or one investment. We’re ready to assist you in achieving all three of those objectives. Please let us know how we can help.
LiveStrong
Michael Checkan
Please let me know if there is anything we can do to help you diversify assets. Simply click here to send me an email, or call us at 1-800-831-0007 or 301-881-8600.
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