What Has Worked in Investing: 1929 to Present

Transcription

1 What Has Worked in Investing: 1929 to Present Eric N Roseman, CIO ENR Asset Management, Inc. Montréal, Canada Sovereign Society s Total Wealth Symposium Hamilton, Bermuda September 14, 2016

2 Today s Presentation: PART I: PART II: PART III: - What is ENR? - Products & Services - Why Austrian and Swiss Private Banking? - Asset Seizures on the Rise since What has Worked in Investing: A Global Comparative since ENR Managed Portfolio Performance

3 What is ENR Asset Management? Based in Montréal since 1992 Founded Global Mutual Fund Investor (1992) Managed first portfolio for founder of Mackenzie Financial in 1993 Joined Agora in 1995; became Investment Director of The Sovereign Society in 2007; Founder of Commodity Trend Alert ( ) Devoted to Full-Time Asset Management in 2011 In 2013, purchased Jyske Bank s U.S. business; Thomas Fischer based in Copenhagen joined us in 2013 SEC-registered; FATCA Compliant; over 450 clients US$305 Million (AUMs) Managed Accounts & Self-Directed Options Niche: Helping Americans open Private Banking accounts in Europe since 1996, including IRAs & 401Ks One of the largest SEC advisors promoting private banking in Austria since 1997

4 ENR Products & Services Fast-Track European Private Bank Accounts Lowest Cost European Private Banking Asset Management: Six (6) Global Portfolios Managed Portfolios = 55% less Volatility than MSCI Physical Gold Storage in Austria & Switzerland Move IRAs and 401Ks to Europe Offshore Variable Annuities with 1291 Group Monthly Reporting & Bank VIP Access Online Minimum Account in USA: $100,000 USD Minimum Account in Austria: $300,000 USD Minimum Account in Switzerland: $500,000 USD

5 ENR Annual Fee Schedule Three Tiers of Services Available: Self-Directed European accounts: 0.50% Advisory Extra European accounts: 1.0% (decreases to 0.75%) Managed Accounts: 1.5% (decreases to 0.75%)

6 ENR Investment Philosophy Diversify Portfolio Globally and Diversify Banking Jurisdictions ENR Investment process: A) Macro View (Growth Cycle, Inflation, Interest Rates) B) Identify Secular Themes (Long-Term) C) Bottom-Up Analysis (Value and Dividends) D) Asset Allocation Buy-and-Hold Does Work! Ben Graham Value Investors Global Contrarian Value Investing mostly with Dividends Stick to Big Brand Name Companies with Global Revenues Minimize Portfolio Trading and Costs Will Hedge Portfolios to Protect Capital

7 Why Austria and Switzerland? We all invest globally (stocks, bonds, currencies etc.) but what about private banking diversification? Is your stock portfolio diversified? What about bank accounts? Most Americans (and other nationals) keep all of their wealth under the auspices of one government, in one country, in one legal system and denominated mostly in USDs Local investments and debts are concentrated in US securities, real estate, life insurance, ERISAs etc. Our Goal: Helping you move tax compliant wealth abroad Individuals have too much invested in USDs and at home While it s still legal, move tax compliant assets to Austria or Switzerland: Confiscation of IRAs or 401Ks Ahead? Vienna and Zurich strong financial centers for deposits, global securities, gold storage and private safety deposit boxes Safety: Higher Basel III Liquidity Ratios at Wiener Private Bank Austria, Bank Winter Austria, Vontobel Bank Zurich Takeaway: Never keep all of your wealth in one country!

8 Domestic Assets First to be Seized in Confiscation

9 Big Brother and Confiscation History of Government Confiscation & Seizures at our Workshop tomorrow at 5.30pm Deepening Economic Crises = Confiscation Massive and Unpayable Global Debt Burdens Eastern Europeans Seize Private Pensions Governments Always Seize Domestic Assets First; Maximize Expediency Still Legal to Open a Foreign Bank Account Store Foreign Currencies, Gold, Jewerly etc.

10 Part II

11 What Has Worked (and Hasn t Worked) in Investing: 1929 to Present Dividend Investing Beats the Market Indexing Beats Active Managers (cost advantage) Lowest Price-to-Book Value Beats the Market Lowest Price-to-Earnings Beats the Market Small-Cap Stocks Beat Large-Cap Stocks Hedge Funds don t Beat the Market, don t Hedge and Provide Poor Liquidity and Charge High Fees Long-Term Compounding to Build Wealth Buy-and-Hold Works Best & Minimizes Costs Market Timing is almost Impossible Tax Minimization and Tax Deferral Sources: Tweedy, Browne Company LLC, Keppler Asset Management, MSCI, David Dreman: Contrarian Investment Strategies, Mark Hulbert, The Wall Street Journal.

12 Annualized Returns since 1929 U.S. Small-Cap Stocks: 11.9% S&P 500 Index: 9.4% Long-Term Corporate Bonds: 6.0% Long-Term U.S. T-Bonds: 5.5% Intermediate U.S. T-Bonds: 5.4% 30-Day Treasury Bills: 3.5% Sources: The Wall Street Journal, Ibbotson, Mark Hulbert.

13 20 th Century Nominal Returns

14 S&P 500 Dividend Aristocrats versus S&P 500 Index (2006 to 2016)

15 Dividends Beat the Market

16 Why Foreign Stocks Matter

17 Global Dividends Rule

18 Value vs. Growth Overseas: Country Value Stocks Growth Stocks Value Advantage Japan 14.55% 7.55% 7.00% U. K % 13.25% 4.62% France 17.10% 9.46% 7.64% Germany 12.77% 10.01% 2.76% Italy 5.45% 11.44% -5.99% Holland 15.77% 13.47% 2.30% Belgium 14.90% 10.51% 4.39% Switz % 10.34% 3.50% Sweden 20.61% 12.59% 8.02% Australia 17.62% 5.30% 12.32% Hong- Kong 26.51% 19.35% 7.16% Singapore 21.63% 11.96% 9.67% Average 16.55% 11.27% 5.28%

19 The Small-Cap Effect since 1926 Small-caps beat large-caps 56% of rolling 12-month periods since 1926; increases over longer periods (5, 10, 20 years) Best time to buy Small-caps is during late stages of economic recession Sources: Macquarie, The Financial Times.

20 Decade Average Return: DJIA 1900s: 9.96% 1910s: 4.20% 1920s: 14.95% 1930s: -0.63% 1940s: 8.72% 1950s: 19.28% 1960s: 7.78% 1970s: 5.82% 1980s: 17.57% 1990s: 18.17% 2000s: -9.30% 2010s: 9.00% Dividends not included. Source: ENR Asset Management, Inc.

21 Market Timing: 1963 to 1993

22 Avoid Hedge Funds! Credit Suisse Hedge Fund Index S&P 500 Index 2016 YTD -0.49% 7.60% 3-Yr. Avg. 2.58% 11.16% 5-Yr. Avg. 2.97% 13.38% Jan % 9.16%

23 Part III

24 ENR Performance 2016 YTD ENR Global Contrarian: +6.17% ENR Aggressive Growth: % ENR Medium Risk: +3.04% ENR Low Risk: +2.78% ENR All-Asset: +6.35% ENR Precious Metals: % MSCI World Index: +3.41% S&P 500 Index: +7.70%

25 ENR Core Investment Themes Food & Beverage Conglomerates Defense & Aerospace Discount Retailers/Dollar Stores Japanese Equities (Nikkei) Consumer non-durables

26 ENR Global Contrarian U.S. Stocks: 46% Foreign Stocks: 21% Short S&P 500: (5%) Short-Term Bonds: 15% Cash: 13% Gross Exposure: 67% Net Stock Exposure: 62% U.S. Dollars: 79% Non-USD: 21% ishares Short Treasury (9.7%) Kraft-Heinz Corp. (7%) Berkshire Hathaway B (5.6%) ishares MSCI Hedged Japan (5%) ishares Floating Rate Bond (5%) Ranger Equity Bear (4.8%) General Electric Co. (4.5%) Apple Inc. (4.3%) Procter & Gamble Corp. (4.1%) Nestlé (4.0%)

27 4 Easy Ways to Get Started 1. Complete private banking custodial application forms 2. Choose ENR Service 3. Sign ENR contracts 4. Wire transfer funds 5. Go!

28 ENR Workshop with Thomas Fischer and Eric N Roseman Thursday, September 15 at 5.30pm: Gardenia 1 Anti-Confiscation Roadmap: How to Protect your Wealth in the Age of Big Brother and Government Profligacy

29 Visit our Booth! Schedule Private Consultations ENR Fact Sheets September edition of ENR Market Outlook now available! Sign-Up for FREE monthly ENR Market Outlook! Enquiries: Thank You!