The last couple of years have been kind to me. My portfolio has grown substantially with what I consider a minimal risk portfolio. I have mainly held AAA rated, short term bonds and have still seen my profits rise. Why? Because a lot of my investments were in Euro and related currencies but now I am now making some major changes. See why below.

To get the most from this message see the fundamentals of my financial thought in a previous message here.

You can review of my portfolio a year ago at international_investment_portfolio_2.htm

You can review my portfolio and the changes made six months ago at:
http://www.garyascott.com/archives/2003/07/31/876/index.html

Here is my portfolio today:

Investment Currency Int Rate. Maturity %

CURRENCIES

Current account USD 1.75% Demand 3.0%

Current account AUD 4.75% Demand 5.0%

Certificates Dep USD 3.41% 1 Year 5.0%

Certificate Dep GBP 3.00% 1 year 4.0%

Current Liquid Percentage Total of Portfolio 17.0%

INTERNATIONAL BONDS

Ford Motor Credit GBP 7.250% 02.2005 1.0%

Deutsche Bank London USD 0.000% 08.2005 1.0%

Goodyear Tire EUR 6.375% 06.2005 2.0%

Spintab SWE SEK 5.750% 06.2005 3.0%

Great Belt Bonds DKK 4.000% 11.2005 1.0%

Neder Waterschaps AUD 4.750% 12.2006 1.0%

Westpac Trust NZ NZD 6.000% 01.2006 1.0%

GMAC EUR 5.750% 02.2006 1.0%

Landwirt. Rentenban NZD 5.250% 03.2006 1.0%

Lloyds TSB Group GBP 8.500% 03.2006 1.0%

GMAC Intl. Finance NOK 7.750% 04.2006 1.0%

LB Reinland-Phalz AUD 5.875% 07.2006 5.0%

Great Belt Bonds DKK 4.000% 12.2006 3.0%

Landwirt. Rentenban AUD 4.500% 12.2007 3.0%

Norway S467 NOK 6.750% 01.2007 5.0%

Dresdner Bank Bonds EUR 4.000% 01.2007 3.0%

Council of Europe USD 4.875% 01.2007 3.0%

Rabobank NL USD 4.875% 01.2007 1.0%

Westpac Trust NZ NZD 6.000% 03.2007 1.0%

Nederl. Gemeenten USD 5.000% 03.2007 1.0%

Ford Credit Canada GBP 7.250% 12.2007 1.0%

Swedish Export Cred NZD 6.250% 12.2007 3.0%

Scandinavian Airline EUR 6.000% 06.2008 1.0%

Current Bond Percentage Total of Portfolio 44.0%

S T O C K S

Jyske Bank Shares DKK Stocks 3.0%

A.P. Maersk-Moeller DKK Stocks Sold

Bank of Florida USD Stocks 3.0%

Current Stock Percentage Total of Portfolio 6.0%

Currencies FOREX: USD. US Dollar, AUD, Australian Dollar, DKK, Danish Kroner, GBP, British Pound, NZD, New Zealand Dollar, EUR, Euro, SEK, Swedish Kroner, NOK, Norwegian Kroner,

OTHER ASSETS

Gold Gold 3.0%

Silver Silver 1.0%

Tax Lien Loan @ 7.0% 5.0%

Farm Land 12.0%

Buildings 14.0%

Wellness Business 3.0%

Current Percentage Total of Portfolio 38.0%

INVEST LOAN

Invest Loan CHF 1.875% -5.0%

Here are some facts to note about this portfolio.

First I do not measure my performance with any one benchmark...except my cost of living. I have one simple goal....to pay for my cost of living and end up with a higher value portfolio than before.

Second, I expect the U.S. dollar to weaken in the long run so only 14% of my liquid portfolio is in U.S. dollars at this time.

Third, I have increased my real estate position from 28% to 38% and am looking to put half of my liquidity into real estate which will increase the real estate portion of my portfolio to about 45% of the total portfolio.

Fourth, I believe that U.S. inflation has been understated and will now become more obvious.

Fifth, I have borrowed 5% of my portfolio in Swiss Francs at 1.875% to enhance the earnings from the Euro and European currencies that represent 25% of the portfolio. These investments are earning an average of 4.5% so this loan is earning an extra 2.125% on that portion of the portfolio. In addition the Swiss franc has dropped 1.3% versus the Euro in the past six months so this has added some extra profit.

Sixth, I maintain a 25% trailing stop loss on my equities so when Maersk dropped from 51,000 DKK per share to 39,000 DKK I exited this position. This leaves my portfolio with only two equities at this time, Jyske Bank and Bank of Florida, both institutions that I know well.

Seventh, the percentage of the gold and silver has dropped as an overall part of my portfolio as I have failed to add any new metal positions as the portfolio has grown.

Next message on Friday, looks at the research I have used to make these decisions. Until then, good investing.