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Most investors are always alert for ideas on how to gain
profit. Yet few know much about currency investing basics.
The first rule of Currency Investing Basics is to look
at risk as well as potential profit. Only when you face potential
rewards and risks, can you make a truly sound currency investing
basics decisions. This special report begins by looking at
ways to view currency investing basics risk. Then future
lessons look at what I have written about the Multicurrency
Sandwich over the past five years.
This first lesson is updated
from Currency Investing Basics I posted at my GaryScott.com website
in September 2000.
Silent shadows, children of dusk, are born
with the setting sun. They are quiet images of pine that
lengthen across the forest floor darkening with the dying
day. Pencils of twilight filter in rosy shafts through
the trees. The coolness of a summer's night falls. Eventide
surrounds us with stillness, quiet and calm-as we join
this silent time of rest that is so much at peace.
July 4, 2000 . The quiet woods
at sunset - Merrily Farms in the Blue
Ridge at Little Horse Creek. With
the holiday in full swing, Merri and I stayed off the busy
roads and headed up into the woods on the farm instead.
While there, I cleared my mind to start mental preparations
for the International Investment Seminar in Zurich where
I will speak. The greatest way to prepare for three days
of straight talking is to stop talking so I listened to
nature all day instead.
Currency Investing Basics
In the upper meadows there are waving fields of wild flowers,
like huge blankets of snow, in full harvest. Groves of hemlock,
maple and birch loom in the mists of early morn. Reaching
the woods before dawn, Merri and I slipped in quietly and
spent the day sitting, and being totally quiet. Watching
the sunrise and set were the busiest activities of the day.
Nothing else was busy or noisy except on several occasions
a large flock of crows.
After a hearty lunch of hot, thick split pea soup and chunks
of fresh, home- made bread, warmed over a camp fire and eaten
on a flat, grassy knob where the views go on forever, we
took a long hike around the land. Then we stopped at Fawn
Meadow (where often fawns bounding away can be seen), and
basked in the quiet, peaceful surroundings of this open area
that is totally surrounded and hidden by pinewoods. The southern
exposure makes it a trap for the warm afternoon sun so we
parked ourselves against a tree in the shade for just a little
rest. The nap turned into a deep, long, rejuvenating, fresh
air sleep.
When we awoke, the stillness of dusk had begun. Shadows
flickered through the trees. The stillness grew. Everything,
even the crickets went silent. We just sat there, until the
night, in the silence and peace. (More about the farm at www.littlehorsecreek.com)
Currency Investing Basics Thoughts
In this stillness I had some thoughts I want to share in
this report with you about a groundswell of investors who
believed in the 1990s that U.S. shares were the best (maybe
the only) place to invest. But now they are now having second
thoughts. Many will abandon U.S. shares. This creates risk
in the market. Plus many more will invest abroad
which puts the U.S. dollar at risk.
I was thinking about this because U.S. indices have already
dropped dramatically and recently the U.S. dollar has appeared
soft.
Jyske Bank
Currency Investing Basics History
Market events in the late 90s remind me of the past thirty
years. In the late 60s I first started giving international
investment recommendations. At that time the U.S. market
was at the top of its largest bull market ever. New issues
were rampant, the dollar was king, and many investors thought
the market would never fall.
But the market did turn and headed down. Over the next
14 years (1970-1984) the Dow barely rose (about 5% per annum
on average). But in U.S. dollar adjusted terms, the market
actually fell and fell hard.
At that time, I had recommended five mutual funds, one
that invested in Japan , one in Australia , one in Switzerland
, one in Germany and one in gold. This seems mundane
now, but in the 60s this was way out stuff!
These markets tripled over the next several years. They
did very well, but not as well as it appears because a lot
of the apparent gain was due to the fall of the U.S. dollar,
not the rise of those five markets.
In 2000 we faced the same two risks,
a weak U.S. stock
market and a falling U.S. dollar. Protecting against
the market is easy. We can simply get out and move into
cash. But how do we protect against a falling U.S. dollar?
See how in Lesson
#2 of this course on currency investing
basics.
Gary Scott
Join Gary Scott and Jyske
Bank at an International Investing and Business Course. Details
are at GaryScott.com
To learn more about Gary
Scott go to GaryScott.com
To understand currencies, you need to understand countries.
Learn more about Denmark
and the Danish kroner at DanishHistory.denmark.dk/
Picture
of Copenhagen 's
Tivoli Gardens from Europeforvisitors.com
Jyske Bank specializes in
currency investing basics. Attend Jyske
investing seminars in Copenhagen. Details available from
Thomas Fischer
at FISCHER@jyskebank.dk |
