By Gary
Scott
International investments can help you gain
profit and safety and there is an old saying about investors. "Sometimes
Bears win. Other times Bulls win. Hogs always get slaughtered." However
there is a way to enjoy excellent profits as a hedgehog.
This message looks at a MultiCurrency Sandwich portfolio
that hedges the value of US dollar and suits those who believe
that the greenback may maintain its value versus other currencies,
but want protection in case it does not.
US Dollar Hedge MultiCurrency Sandwich
Starting Date 10/21/05
$100,000 Invested & $200,000 Borrowed
| $ Amount |
Currency |
Investment |
% Yield |
| $12,000 |
BRL |
12.5% Brazil Rep 05-01-16 |
11.82% |
| $30,000 |
AUD |
5.5% Landwirt Rentenbank 16-04-07 |
5.48% |
| $30,000 |
GBP |
7.125% British Tel 07-12-06 |
7.32% |
| $30,000 |
HUF |
6.25% Hungary Gvt. 12-06-07 |
6.20% |
| $30,000 |
ISK |
0% Iceland 09-02-2007 |
11.20% |
| $30,000 |
MXN |
8% Mexican Fix Bonos 24-12-08 |
7.89% |
| $30,000 |
NZD |
6.5% ABN Amro Bnk 08-02-08 |
6.47% |
| $12,000 |
TRY |
14.5% E.I.B. 21-02-07 |
14.34% |
| $15,000 |
USD |
7.2% Ford-Global 15-06-07 |
7.10% |
| $15,000 |
USD |
3.875% Deutsche Telekom 22.07.08 |
3.78% |
| $30,000 |
EUR |
JI High Yield Corporate Bond Fnd |
5.00% |
| $36,000 |
USD |
JI Emerging Markets Bond Fnd |
7.00% |
Total Invested $300,000
Estimated Gross Income $ 21,800
Loans in UD$ Equivalent
20.00% JPY 1.63% 40,000
80.00% CHF 2.38% 160,000
Total Loan $200,000
Total Estimated Loan Cost $4,460
Net Amount Invested $100,000
Estimated Income After Loan Cost $17,340
You can see subtle changes in this portfolio if you compare
it to the US dollar long and short portfolios. Less belief
in the greenback (than in the dollar long portfolio) means
that weightings in the British pound, Hungarian florin, and
euro are increased. Weightings in the dollar linked Mexican
peso and US dollar denominated bonds are reduced.
This portfolio has a slightly reduced potential over the
long but is still projected to return 17.34% per annum on
the initial $100,000 invested.
The profit projection is made before calculating fees.
Plus there are risks. Study Lesson
14 of International Currencies
Made EZ.
This is a free online course to help you understand the
risks and rewards of the multicurrency sandwich.
In addition to enhanced profit potential investors who
hold this type of portfolio gain security and stability by
having a diversified basked of currencies.
There are those who believe in a steady US dollar. If their
beliefs are correct, they can earn 17.34% with this hedge
and not be a hog. Perhaps they'll even gain some extra forex
profits.
If you have not enrolled in our MultiCurrency tracking
Service go to our catalogue.
International investments and currencies can help you gain
safety and profit. Until next message, may all your investments
be good!
Gary
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