International investments take many forms. To help everyone see what can be done we periodically look at Merri’s and my investment portfolio. We do not suggest that this should be your portfolio. We only hope that sharing why and how we make changes can help you direct your financial planner and affairs.

We seem to be at an end of a seven year period in our portfolio. We have been making some big changes so let’s look at the portfolio, then the whys and how.

Investment	Description	Currency	Int. Rate	Maturity	% of Portfolio
Current account		US$	4.500%
Current account		Brit Pds.	4.000%
Current account		NOK	2.000%
Current account		AUD	5.125%
Cert. Deposit		US$	5.110%
3 Month Money Mkt.		US$	5.205%
Cash Total					15%
Shares	Bank of Florida	US$
Shares	Jyske Bank	DKK
Shares	HYFLUX LIMITED	Singpore $
Shares Total					7%
Mutual Fund	Jyske Invest Latin America Fund	USD
Mutual Fund	Jyske Invest Eastern Europe Fund	EUR
Mutual Fund	Jyske Invest German Equity Fund	EUR
Mutual Fund	Jyske Invest Japanese Stocks
Mutual Fund	Jyske Invest CHINA
Mutual Fund	Jyske Invest INDIA
Mutual Fund	Jyske Invest FAR EAST
Mutual Fund	Jyske Invest Favorite Stocks
Mutual Fund Total					7%
Bond	LB Reinland-Phalz	AUD	5.875%	24.07.2006
Bond	Great Belt Bonds	DKK	4.000%	20.12.2006
Bond	British Telecom	GBP	7.125%	07.12.2006
Bond	Landwirt. Rentenbank	AUD	4.500%	28.12.2006
Bond	Norway S467	NOK	6.750%	15.01.2007
Bond	Rabobank NL	USD	4.875%	23.01.2007
Bond	Council of Europe	USD	4.875%	23.01.2007
Bond	Westpac Trust NZ	NZD	6.000%	05.03.2007
Bond	Nederl. Gemeenten	USD	5.000%	22.03.2007
Bond	Ford Credit Canada	GBP	7.250%	07.12.2007
Bond	Swedish Export Credit	NZD	6.250%	19.12.2007
Bond	Dresdner Bank	EUR	4.000%	19.01.2007
Bond	Landwirt. Rentenbank	AUD	5.500%	16.04.2007
Bond	Hungary Governm.	HUF	6.250%	12.06.2007
Bond	Scandinavian Airlines	EUR	6.000%	20.06.2008
Bond	Spintab SWE	SEK	5.000%	18.06.2008
Bond	Deutsche Telekom	USD	3.875%	22.07.2008
Bond	NRW Bank	NZD	6.500%	26.08.2008
Bond	Volkswagen Intl. Finance	NOK	5.000%	10.11.2008
Bond	Rabobank NL	CAD	4.250%	05.01.2009
Bond	European Investment BK	TRY	10.000%	28.01.2011
Bond	Hungary Govern	HUF	6.750%	12.02.2013
Bond	Brazil GVT	BRL	12.500%	05.01.2016
Bond Total					33%
Leverage	Invest Loan	CHF	2.750%	-208,634	-12%
Gold
Silver
Metal Total					4%
Farm & Commercial Property					46%
Breakdown By Investment Type
Current and CDS	15.6%
Stocks	7.2%
Mutual Funds	6.7%
Bonds	33.32%
Metals	4.00%
Real estate	46.00%
Loan	-12.82%
Breakdown By Currency
US$	56%
Brit Pd.	9%
Emerging	8%
Euro	9%
Danish kroner	7%
NZ$	4%
Norway kroner	3%
Aust. $	3%
Japan yen	2%
Swede kroner	1%
Canada $	1%
Swiss franc	-12.0%

Seven years ago we shifted our portfolio as we sold most of our publishing business and shifted to an internet only affair. Interest rates and inflation were low then. Our interest was developing income then and seeing our bond values rise as interest rates dropped. At that time we were most heavily invested in bonds denominated in euro and affiliated currencies (British pounds, plus Danish, Swedish and Norwegian kroner). Second we were adding real estate we could enjoy and use in our business that would appreciate as well.

The portfolio above shows that as bonds have matured we have now added many more equities and emerging market currencies.

This is because we believe in global inflation and a weakening US dollar.

Here are some thoughts on our portfolio. First, we are increasing shares, but still only have three specific equities. Two of these equities are in businesses (banking) we know well, These are companies where we know the top management well as well. The third is based on our belief that water will become increasingly scarce, plus is a play in China. This company (Hyflux) does a big part of its business in China. We are adding other equities via mutual funds. We have chosen only ideas (Germany, Japan, India, China, Latin America and Eastern Europe) and let Jyske managers decide on the specific shares in each region. Our biggest weighting is in Japan with Emerging Asia second and the rest at equal weightings.

Second the portfolio is over diversified. This has to do with our PIEC three phase investing formulation. If you do not understand PIEC, see garyascott.com/archives/2000/02/02/55/index.html

Our business absorbs our main time, energy and interest. This portfolio’s goal is to keep our second and third tier capital stable until it is required and protect this capital against inflation. The diversification almost guarantees protection against doing really well. On the other hand it also keeps volatility low. This last month, which has been the second worst in a decade, the portfolio only dropped about 4% for the month. This is not as bad as it seems since the portfolio had risen almost 2% the month before. Even after this really terrible month the overall portfolio is still up over the last year.

Third, we continue to hold a large percentage in real estate. Well purchased and managed land will fight inflation and a falling greenback. Plus the land (farmland attached to our home) provides recreation and helps our business. This adds a huge holistic value to this asset! We enjoy this real estate, use it in our business and it has appreciated about 700% in the last seven years.

Learn more about fighting inflation by investing in emerging currencies, gold, silver, Ecuador, import-export, overseas markets and more. Join Merri, Thomas Fischer from Copenhagen and Steve Marchant from Ecuador and me at our September 15-16-17, 2006 International Business and Investing Made EZ course in North Carolina. Review where to invest and do business now and learn which markets and currencies may be strong in the year ahead. Learn more about Ecuador import and export from Steve. Our May course was overbooked and the September up date is coming along. Our free accommodations are reserved on a first come first served basis so do not delay! Go to http://www.garyascott.com/catalog/ibeznc

Gary