Monday, September 17, 2012

Investment Plan

Developing an Investment Plan:
In order to invest wisely, you need to have a suitable investment plan that will ensure the appropriate amount of growth for you. Your investments will also need to be safe and easy to manage.
The first step in developing an investment plan is to identify what type of an investor you are. Investor types are often determined by their stages in life. Here is a guide:
- Single person under 40 years old. Focus: Long-term investments, medium to high risk. Emphasis: capital gain, compound growth.
- Two-income married couple, no children, aged 20 to 40 years. Focus: Long-term investments, medium to high risk. Emphasis: capital gain, compound growth.
- One-income family, young children, aged 20 to 40 years. Focus: Long-term investments, low to medium risk. Emphasis: compound growth.
- Single person, aged 40 to 60 years. Focus: Medium-term investments, medium risk. Emphasis: capital gain, compound growth.
- Married couple with adolescent or independent children, aged 40 to 60 years. Focus: Medium-term investments, medium risk. Emphasis: capital gain, compound growth.
- All investors, aged 60 and over. Focus: Short to medium-term investments, low risk. Emphasis: Income.

UK land represents some of the best investment land available

UK land represents some of the best investment land available. These eight facts, presented by a land planning and land investment expert, will tell you what wise investors already know about investing in land
1) Investing in UK Land is a real asset
You can see, use, and most importantly, build on investment land. You hold the legal title deeds to your investment land as surety. There are no complicated concepts in land investment, just a burgeoning demand for a finite amount of UK land.
2) Investing in Land yields strong returns
A finite supply of UK land partially explains its historically rising value, and implies it is unlikely to depreciate. Mark Twain said, "If something is unable to be manufactured and the underlying demand for it is constant, then its value will tend to rise." Demand for UK land is, at the very least, constant. The property market increases reflect soaring demand for houses from an ever-growing population. Therefore, investing in UK land offers strong returns. It is reasonable to achieve the equivalent of 30-35% annually in a 5-year land investment project. This equates to compounded returns of around 400-450%. Such returns are hard to realise with other UK investments.

Sunday, September 16, 2012

Think Globally - Invest Globally

In the US we often think of ourselves as the center of the universe and invest primarily in our own country. Many US investors put 15%-20% of their portfolios into international stocks for diversification. That still leaves 80%-85% bet on the US stock market and on the US dollar which is a big bet. Due to more rapid growth in other parts of the world over the past 20 years, the US now represents only 43% of the total global equity market values. Thus, to be truly invested on a globally neutral basis, a US investor would have to put 57% of their portfolio into investments outside the US. Is that a crazy idea or a smart idea? Is that too risky?

Will the USA be a laggard in the global economy going forward?
There is a good chance the USA could be a laggard in the global economy over the next 10 years. I am concerned about our ballooning deficits, increased government control and socialism, massive government spending, Social Security/Medicare shortfalls, and the rising tax rates that will be coming. Our corporate tax rates in the US are already the second highest in the developed world. Significantly higher tax rates in the future are inevitable to pay for all this spending and that will dampen economic and profit growth in the US. The government is now talking about healthcare reform in the US that will increase our deficits by another trillion dollars (CBO estimate) over the next 10 years. All of this excessive borrowing, spending and money supply growth has the potential to further reduce the value of the US dollar and to lead to future inflation. That is not good for US investors going forward. Our government, financial institutions, and consumers all have too much debt. They will be deleveraging over the next 5+ years to fix that problem. This deleveraging process will reduce future economic growth. It appears that the US dollar has the possibility of being replaced as the "global reserve currency" as many other international governments (such as China) and investors are worried about these same structural issues in the US. The US dollar recently (September 2009) sank to the lowest level for the year relative to other currencies. Has the USA passed its peak as the dominant and most successful economy in the world, much like the United Kingdom did 110+ years ago? US dollar weakness, relatively sluggish US economic and profit growth, and possible rising inflation in the US are several reasons to consider being diversified internationally. By investing internationally you are protecting yourself from a falling dollar.

Friday, September 14, 2012

Toledo and the Ave


The big suitcase was a great idea, except that it holds so much, and therefore weighs more than any suitcase I’ve ever traveled with. It’s allowed me to bring many things I would otherwise have to buy or do without, but on the other hand, toting the thing down the antiquated staircases in the metro was awful. Thankfully, people are helpful and several big strong young men took pity and carried it down for me. Otherwise, its four wheels did an excellent job of wheeling itself with my other tote bag strapped to the top. 

Neptune's fountain, across
from the Prado Museum
Two weeks in Madrid and I finally knew what I was doing, where I was going, how to get there, and how to not overspend my deflated dollars. It would have been lovely to spend one Euro and think that I was spending one dollar, it would have felt normal, but knowing that one Euro was really spending $1.30 and that a simple bus ride was actually three dollars was not comforting. It didn’t help any that I’d spent six months of this year in Mexico where a bus ride was 5 pesos, less than forty cents. It’s all part of those innumerable calculations one must make while traveling.

As I write this, I am zipping along at about 270 kilometers an hour in the Spanish Ave, a high speed train to Sevilla. The countryside is whizzing past so quickly that I must look further into the distance, or nausea will descend. I don’t think I’ve ever gone this fast while on the actual earth, not even in high school when then boyfriend Tom liked to rev up his Camaro on the straight-aways.

The countryside is golden in autumn, wheat fields have been harvested, and lie in yellow strips across rolling hills. This part of Spain looks so much like eastern New Mexico with its farms and distant purple mountains. The music is an orchestral version of Aranjuez, lost entirely on my seat mates who are plugged into iPods. Occasionally a small pueblo comes into view with a tall church tower, but mostly the country is natural with fields planted where possible. The natural “stuff” is dry with a few sages and grasses, maybe even cacti. We’re going way too fast to focus on anything close. Off in the distance are many olive orchards with their dark gray-green leaves. Most of these are short newer trees, unlike the grand specimens in the Jardin Royal of Madrid. Short is probably preferable when it comes to harvesting.

The Ave tracks have been laid straight across the landscape, with cuts through hills and elevated over the valleys. It does not follow any existing road, but cuts its own swath across the landscape with barely a turn in direction. The pueblos we pass are compact and small, with brick or stone walls and tiled roofs. A couple of times, we’ve passed castle ruins on a hill. Once in while another train whizzes by in the opposite direction, our combined speeds make the passing nothing but a quick shake and blurr. It’s always startling though.

Yesterday, I went to Toledo, at one time the capital of Spain and still a beautiful Medieval city, on a high hill, surrounded on three sides by a river, and with strong thick stone walls. It was for a while in the 1500s, home to the famous Spanish court artist and innovative painter, El Greco. Prior to this trip, I had no real appreciation for El Greco, a Greek who had come to Spain after a sojourn in Italy where he learned painting. His personal style developed over his relatively long life, into what can surely be called early impressionism. I’d noticed that aspect when seeing how different his paintings were, compared to his contemporaries in The Prado, but in Toledo, there is a home and museum entirely dedicated to El Greco, and those painters most influenced by him.


El Greco's pre-impressionist style








Next door is a Synagogue with an interesting history. In the early part of the second millennium the Moors occupied much of Medieval Spain with one of their capitals in Toledo. There was a large thriving Jewish community that built a synagogue with the most dramatic tall ceiling, and lavish carved stone walls. In 1492, before the autumn when Columbus discovered the New World, Queen Isabella and King Ferdinand managed to kick the Moors out of Granada to end the occupation of the Moors and their abominable tolerance for those who followed a different religion. As a result the Jews were also kicked out of Spain and their Synagogue was turned into a Catholic church. To the church’s credit, the beautiful carved walls and pillars were left intact, merely covered over with wooden retablos. The floor, the tile work, and the architecture remained the same. Now it is a museum to the legacy of the Spanish Jews and their history. Many of the Sephardic Jews left, and many more converted to Catholicism only to be ‘tested’ again and again by the Inquisition which used torture to reveal closet Jews, and inspire their conversion. I’ve often wondered what Jesus, whose entire life was about teaching people to love other people and accept them, would have thought of such horrors done in his name and of similar intolerance today as well.











Catacombs under El Greco Museum's patio,
 once part of a large Jewish home, with cisterns
and baths for ritual cleansing. 


One of the official gates to the city of Toledo,
I am guessing they never had much of a rush hour.


In two and a half hours, we have traversed a quarter of the country on the Ave, over mountains, through tunnels, past forests, and in and out of cities like Cordova. It’s greener closer to the coast, and many degrees hotter.  Now, to explore Sevilla!


Tuesday, September 11, 2012

La Reina Sofia

Taken in the Pinocchio restaurant that
has a panel of mirrors, across the
plaza from the Reina Sofia.

The last of the three great art museums I wanted to visit, the Reina Sofia, is devoted to modern art, and the modern Spanish artists that put Spain's art scene on the map: Pablo Picasso, Joan Miro, and Salvador Dali.

Included in the definition for modern art is a series of small paintings done by Goya around 1810. In them, he used painting as a social commentary, a first for artists who previously were portrait and landscape painters, not philosophers. He used art to represent his horror at the consequences of war, where all sides are victims. They are sensitive drawings showing death and destruction, the helping hand for the injured, the loss of children and parents, exactly as he witnessed it, giving the viewer an opportunity to feel the same emotions. It was a big step forward.

Guernica is Picasso's most famous painting, and arguably the most important painting of the 20th century. For the first time, I rented the audio guide and listened to the background information on Guernica, as well as viewing photos taken as it was being painted. It had been commissioned by the Spanish Government, which later fell to Franco's forces. And at Picasso's request, the painting did not return to Spain until democracy was restored. In the ensuing years, the painting traveled all over the world, but now, due to the wear, tear, and inevitable damage to such a huge painting, it is permanently housed in the Reina Sofia.

A number of important Miro and Dali paintings are also on display, along with many artists of the cubist period that I didn't know about. Angeles Santos, at age 17, painted El Mundo, an impressively large painting of a square world surrounded by stars, the sun, and odd bald women with daughters. There is a room of Telluric paintings, a style I knew nothing about previously, and the interesting work of Juan Gris who moved the point of view to the inside of objects as well as outside. Modern thinking reflected in art.

I believe photos were not permitted, but people were taking them without bother, so I snapped a few too. Outside, in the courtyard a Calder mobile rotated in the breezes.

Note the way the woman's hair
gets reflected by the sculpture,
or vice versa....

A work of art, all by itself on a wall.

A Calder.