Friday, October 27, 2006

Six Reasons To Invest Offshore


The following offshore investing information is taken from the excellent Sovereign Society Newsletter. The "A" newsletter is free and is always full of great information.

I know I've written on these matters before, but this is probably more balanced.

Some in the US and UK will usually call going offshore unpatriotic. They seldom realize that the UK and US are the biggest offshore tax havens - for the rest of the world. There are a lot of reasons to send money offshore other than legally delaying tax payments, asset protection from frivolous law suits being one.

Here are six reasons the Sovereign Society found compelling.

Six Reasons Why Offshore Funds are an Excellent Long-Term Investment

  1. Greater choice. The United States is the world's biggest securities market, but the overwhelming majority of mutual funds traded worldwide aren't available on U.S. exchanges. Indeed, of the more than 54,000 funds trading worldwide, only about 8,000 are registered in the United States.

  2. Offshore funds offer a greater margin of safety than most U.S.-based mutual funds during bear markets. Although bear market or reverse-index mutual funds have been available to retail investors in the United States since the beginning of this decade, offshore funds provide a greater spectrum of alternative mutual funds offered to retail investors that can utilize popular hedge fund trading tactics, including short-selling and long/short global equity strategies. In the United States, individuals must be high net-worth accredited investors to buy alternative mutual funds employing defensive market hedging techniques. In the offshore context, that's not the case. Many of the world's leading hedge fund organizations require only $25,000 - and sometimes much less - to get started.

  3. Offshore funds can offer foreign currency diversification. Most offshore mutual funds are denominated in euro while some products are also sold in Swiss francs and British sterling, in addition to the U.S. dollar. In the United States, the mutual fund industry only offers products denominated in dollars.

  4. Offshore funds offer privacy. As with any non-U.S. investment, offshore funds make it impossible for the small army of professional asset trackers, information brokers and corporate espionage specialists that advertise their ability to uncover assets in U.S. bank and securities accounts to track your wealth. That's because when you buy an offshore fund through the auspices of a foreign private bank, that institution acts as your nominee on the transaction, protecting your privacy in the process.

  5. Offshore funds are suitable for certain structures. There are no restrictions on placing offshore funds in retirement plans, offshore annuities, or offshore life insurance policies.

  6. Offshore funds are a hedge against a sudden U.S. market disturbance. For five full days following the terrorist attack of September 11, 2001, the U.S. markets were closed. When the markets finally re-opened, the Dow had dropped 7%. Terrorism isn't the only risk - there are many other reasons why U.S. markets could shut down, such as a potential computer virus or a New York City wide blackout. Access to global trading markets and foreign currencies in an account beyond your home borders will give you added protection should disaster strike.



Its an excellent idea to have some international exposer.

1:53 PM  

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