[Money-matters] FW: [Money Matters Newsletter] Swiss Shuts the Door. Money Matters Update February 28, 2012

Sun Feb 19 03:00:13 UTC 2012

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Subject: [Money Matters Newsletter] Swiss Shuts the Door. Money Matters
Update February 28, 2012

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Swiss Shuts the Door. Money Matters Update February 28, 2012

Marc's Notes:

Welcome new subscribers. Thank you for supporting KVMR during our membership
drive. You will now receive our Money Matters Update in your email. This is
your issue although past readers will know its just one in an ongoing
series.

I have included the four fatal flaws of investing at the end of this
newsletter but first I must update you on news out of Switzerland regarding
our annuities.

Listeners to the show will know I have used these as an easy way to move
money offshore. Completely ok for US citizens to own, denominated in another
currency, it gave us an offshore option which yield dividends, interest and
ongoing payments much like a American Annuity without all the restrictions
and fees their US counterparts had.

I suggested you denominate them in Swiss Francs which subsequently went
ballistic, so much so the Swiss National Bank capped the Francs move a few
months back to about 110 or so at it relates to our dollar.  The annuity
companies then eliminated the Swiss Franc as an option. Those who moved on
Francs before the restriction as suggested did great and will probably
continue to do so. Those who waited cried in their soup.

I warned to move on the annuities themselves quickly as the US government
was putting pressure on foreign countries to rat out tax dodgers using the
mighty US dominance to force or "convince" foreign entities to pass
information to the IRS on US citizens with off shore accounts. "The window
would close"  I warned and to not delay.

As the US noose tightened on legal and illegal investors alike, foreign
companies backed off their US customers under increasing pressure from the
US. Under the guise of getting the tax dodgers, the US actually put their
nose into every aspect of overseas investing whether your were a tax evader
or just an investor looking for some shelter from increasing US interference
in your private lives.

Swiss insurers first raised the minimum investment in Swiss Annuities from
25k to 50 k, and then they instigated a 5 % fee. The increases were to
compensate them for the hassle from US authorities. Now word out that the
window for opening an annuity HAS closed and not from the US side but from
the Swiss side. They inform me they are no longer accepting US clients for
our annuities until further notice. They may never again.

The US has gotten that bad. Shades of imperialistic dynasties in their death
throws. Our country is becoming one of the most controlling and intrusive
and need I say more dangerous than ever to our freedoms. (Just look at the
new laws allowing use of the US military on our soil and detention without
trial).

They can literally make you "disappear" if they so desire and the new law
was signed by the majority of Washington across both aisles.  The commander
in chief brought 2011 to a close by signing the 2012 National Defense
Authorization Act into law, despite weeks of criticism and warnings from
lawmakers and federal officials concerned over the bill's provisions that
authorize the U.S. military to indefinitely detain anyone - including
American citizens - suspected of terrorist's acts inside the United States.
This is getting worse by the day.

As for Money Matters listeners, you still may be able to get under the March
1, 2012 deadline so says my Swiss contacts but there are no guarantees. If
you wish to try for a Swiss Annuity, the time to act is NOW. Email me if you
want to give it a shot. My broker says he may be able to get a few under the
wire but again we cannot guarantee it. I am just glad so many of you and me
took advantage of these offshore options while we could.  

Switzerland still offers offshore options in other types of investments such
as low minimums with global gold (Hear Money Matters Show #135) and they do
offer managed annuities like investments but the minimums are much, much
higher.

What can I say but I warned you.

Email me with your questions. For now we watch the markets climb to 13,000
although the signs are pointing to a fizzle out soon. Greece will get its
bailout and it kicks the can a bit farther down the road (same ol, same ol)
but it doesn't solve anything. The markets will RUN on the Greece bailout
but then most likely wilt once reality sets in. Same pattern we have seen
for almost a year now.

Expect more QE from the Federal Reserve going into election season.      

All for now, now read the four investment flaws below and we will talk soon.

Four Fatal Flaws of Investors and Advisors:

Fatal Flaws #1:

Buy and hold.

Buy and hold works fine in up markets, but so does a monkey with a dart and
a wall street journal. Statistically, it's been proven time and time again,
advisors and the best of money managers don't beat a dart board or the
market indexes in an up market. In an up market ALL STOCKS go up. Buy and
hold works fine in an up market but in a down market, DOES NOT. Don't
believe me? Look at your statement in the last crash. I saw and have seen
hundreds if not thousands of statements. They all hold mutual funds and
every kind of stock known to man. In the last market crash, they were ALL
DOWN. Buy and hold is like an umbrella that only works in the sun. In the
rain, it doesn't work, and if buy and hold doesn't work in down markets, IT
DOESN'T WORK!  You found that out with millions of other investors. So if
you advisor or firm is like any other advisor or firm, you bought and held
all the way down. Buy and hold doesn't work, doesn't protect you and is
MADNESS in the markets we have today.

Fatal Flaw #2:

Markets also go up over the long haul.

If you believe this you simply haven't looked at history, nor haven't
studied past markets nor have any idea what US DOLLAR purchasing power is. I
can show you decades of US stock market charts that show NO GROWTH over 10,
12  or 15 years. Just look at the last decade for your most recent example.
Dow 11750 in the year 2000, DOW 11700 or so in 2011. ELEVEN YEARS.

The most recent 10 years shows less than ZERO GROWTH and actually a 30 %
LOSS or more if you factor in US dollar purchasing value lost.  That doesn't
include losses from inflation, otherwise known as dollar purchasing value
loss.

Use inflation adjustments over the last century and the US stock market has
done little better then a no risk US BANK ACCOUNT. There is one difference
however and that is bank account are guaranteed NOT TO LOSE value, and also
no loss of sleep by you. Markets in true value do not go up over the long
haul and especially now, this thinking is a sure way to more losses down the
road.

Fatal Flaw #3:

No exit or sell point.

Most investors and advisors, believing markets always go up over the long
term and always come back, don't have an exit point.

In other words, at what point do you sell out?

They do not have an absolute point of loss, or SELL conviction point.

It should be either percentage wise or a preset DOW level.

Most investors and advisors think that when they are down 5 or 10 %, they
are not down far enough and refuse to sell. That mindset continues until
they are down about 30 % or more.

Then the mindset changes from you are not down far enough to you are down to
far to sell. Let me tell you one thing right now. You're lucky the markets
stopped where they did in 2009. If the government hadn't stepped in  and
literally poured trillions into the market, your firm or advisor or money
manager, believing markets always come back, would have ridden it AND YOU
all the way down.

Then the SELL point does arise in an investors mind by default and under
duress.

That "capitulation" point is usually down around a 75 or 80 % loss.
Investors then panic and want to get out with at least something and a
climax selling point is reached.

That's when everyone sells. It's called the climax bottom, and strangely
enough, that's where you should actually be buying.

Like I said, your lucky the market stopped where it did.

So I want you to ask your self, did your advisor call you and say sell? Did
your firm sell all your holdings somewhere down the slide? Did you sell?

Because if they didn't, or you didn't, then you fit this fault to a "T ". 

You NEVER HAD an exit strategy, they never had a fire door out, they never
really had a plan, and you never had a chance. And that's  where all your
money is, your retirement is, based on a game of chance. Don't take that
chance again. Plan an exit point and stick to it.

.

Fatal Flaw #4:

Owning a basket full of mutual funds is diversified.

Do you believe owning a basket full of mutual funds and or bonds or a
combination of both is diversified? If your portfolio owns only mutual
funds, money market funds and bonds, you are about as diversified as a wall
painted white.

If you own a basket full of mutual funds, why is that not diversified? Well
what do you all own?

All stocks! 

And which way does the market have to go for you to make money?

UP.

And if you own all US stocks, the US market has to go up. And remember, even
if you own foreign stocks, ALL STOCKS except contrary stocks, stocks that
move in opposite of the market, go DOWN.

If you own one stock or one mutual fund or a HUNDRED, if the stock market
falls, ALL STOCKS GO DOWN, no matter what company they are, no matter
country they are in, no matter how big the mutual fund is.

In the last market downturn, and indeed in major future market wipe outs,
ALL STOCKS GO DOWN.

So even if you own a zillion mutual funds, if the stock market crashes, YOU
CRASH WITH IT. True diversification should be balanced.

If something goes down, something goes up right. After all, diversification
MEANS BALANCED. And it doesn't mean owning a basket of mutual funds, that
all depend on a rising stock market, that all depend on an UP market.

If your portfolio from John Jones or Merrill Lehman or Infidelity or John
Smutz or your financial advisor holds all bonds and stocks, then again, you
are EXACTLY in what I am specifically warning you against. 

You are so NOT diversified. If what you hold sounds like exactly what I just
mentioned, you don't have a financial advisor, you have your life savings
invested with  someone that not in the least bit understands what investing
is really about, what protecting you is about, what diversification is
really about.

And one more fatal flaw in their investing strategy:  You know how much I
recommend and like dividend payers. Well first off, I am advising that you
only have a very small portion of your money in stocks, and its not because
of the market specifically, but because you should not have a big portion of
your money in any one asset. True diversification means owning many other
things BESIDES stocks. Think of a centipede with many legs. Only one leg
should be a stock leg. The other legs are just as easy to own but protect
you in so many other ways. These other "legs"  don't listen to, nor care
about a stock market crash.  You should also be in foreign currencies, some
savings accounts, some overseas bonds, some gold and silver, real estate,
some stocks that go UP in down markets, some foreign bonds, some overseas
accounts: basically many, many different areas, and again, only a small
portion in stocks. Furthermore, when you DO own stocks, almost ALL your
stocks should pay you interest or dividends in my opinion.

Why? If investor A owns a stock that pays 10 % interest or dividends, and
investor B owns a mutual fund that pays you nothing, (like most mutual
funds), which way does the market have to go for investor B to make money?

UP!

But if you are getting paid interest or dividends of 10 % (for example), you
make 10% while the other investor makes nothing. Compound that over 10 years
and investor A makes 2.5 times the money investor B makes, even if the
market goes nowhere!

And remember, since all stocks move together, dividend stocks will likely go
up just like the non dividend payers will if the market takes off.

18 % dividends will quadruple your money in 4 years while others sit waiting
for the market to go up.

Did you double your money in the last 4 years? Did you quadruple your money
in the last 8? If you are sitting in non paying mutual funds waiting for the
market to go up, your probably going to be waiting a long time. That's why
this DREAM PORTFOLIO may hold the key to much greater success, safety and
returns then any other investment plan and why its worth considering.

The four fatal flaws once again.

Buy and hold works - it does not.

Stocks always go up in the long run - no they do not.

No exit strategy- make one.

Holding a basket of mutual funds it diversified- no it is not. See the DREAM
PORTFOLIO.

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