Ross Naylor's Ezine - Issue 1


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Ross Naylor's Ezine - Issue 1

  1. 1. Ross Naylor +48 (22) 389 65 70 (w) +48 512 275 706 (m) ul. Królewska 27 lok 411 Warszawa 00-060 Poland. Triple A? Are Words from the wise... you sure? "Just because you cant predict when something will A recent update from the United happen doesnt mean you States Government should act as though it wont Accountability Office (now happen" Dylan Grice, theres a paradox) states that Societe Generale using reasonable assumptions "roughly 93 cents of every dollar of federal revenue will be spent on the major entitlementprograms and net i nterest costs by 2020." I.e. in 10 yearsfrom now, 93% of all tax revenue that the US governmentcollects will go to pay social security, Medicare, Medicaidand the interest costs on their national debt. This isbefore paying for things like defence, education,unemployment benefi t or anything else that you wouldassociate with the normal business of government. 2nd Polish ETFAt the same time the rating agencies still have the USgovernment as Triple A!? Apparently, they are the bench Some of you will havemark for everyone else to aspire to. God help us. received an e-mail from me at the end of last year,So how does this affect you? announcing the first Polish market Exchange TradedWell firstly, check your investment portfolio. If a large Fund (ETF), provided by Vanportion of it is USD denominated and your future liabilities Eck Global. Well it now has company. ETF giant iShares
  2. 2. are not likely to be in USD, then you should look at has recently launched theirdiversifying. MSCI Poland Investable Market Index Fund.Secondly, if you are lucky enough to still have an Like the Van Eck fund, itemployer pension scheme and you work for a company tracks an index of Polishthat is American or your salary is denominated in USD, stocks. There is no activecheck where the pension money is invested. If a large management, so expensesportion of it is invested in US government bonds as a are kept to a minimum.default option (highly probable), you might want to see if Another similarity is its heavythere is a way to diversify some of it into other currencies weighting towards financialor asset classes. stocks, hardly surprising given the make up of the Polish stock market. It also has a similar number of holdings (around 30).From the horse s mouth The benefits of both is thatI recently had the they provide a cheap, liquidopportunity to quiz our and simple way of gainingAmerican intern about reasonably diversified exposure to the Polish stockthe costs involved in market.completing his 4 yearBachelor degree in his While there is not much tohome country. He is a choose between the 2 funds,recent graduate so his the Polish market attractingfigures are up-to-date and somew hat shocking. They are more attention is positiveas follows: news and the competition should keep both on theirTuition - USD120,000 toes.Dormitory Fees - USD40,000Textbooks - USD5,000 Disclaimer:Living costs (relatively modest) - USD24,000 The views expressed here are my own. They are not necessarily shared by AES International. TheyTotal Bill - USD189,000 are subject to change at any time based on market and other conditions. This is not an offer orThere are some ways of offsetting this cost e.g. financial solicitation for the purchase or saleaid, scholarships etc. However, these are by no means of any security and should not beguaranteed and are likely to have been reduced due to construed as such. References tomany university endowments having lost sizable sums of specific securities are formoney during the recent financial crisis. illustrative or informational purposes only and are not intended to be, and should not beWe are currently working on further in depth research interpreted as, recommendations
  3. 3. into the cost of educating children in the United States to purchase or sell such securities.(and United Kingdom) as well as ideas on how to fundthese costs. These reports should be ready in time forthe new academi c year, so look out for them if this is anissue that concerns you. Call me: +48 (22) 389 65 70 (w) +48 512 275 706 (m)