Marty René REYL Overseas

REYL Overseas: Learning from the sailors

REYL Overseas: The word opportunity comes from the Latin term “opportunitas”, which is composed of two parts: “ob” meaning “toward” and “portus” meaning “port”.

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By René Marty, CEO of REYL Overseas Zurich, a Swiss SEC-registered investment advisor serving U.S. clients

This word came about in the realm of navigation, where sailors used the phrase “ob portus” to describe the best combination of wind, current, and tide to sail to port. However, the only way to seize such weather conditions was if the vessel’s captain had already sighted the port of destination.

Knowing the weather conditions without knowing the destination was useless. Therefore, a ship was in a state of “opportunitas” when its captain had decided where to go and knew how to get there.

Forward thinking

Likewise, deciding to reduce the home-bias of a US-only based investment portfolio and choosing a destination in order to pursue this quest is a combination of forward thinking, risk appetite and strategy. Looking ahead to steer towards new horizons to a safe haven, where long-term stability, security and respect for privacy are dominating factors.

Opportunities for Wealth Tax benefits are appealing. There are legally compliant methods of securing your assets.  With certain structures (trusts, insurance policies, etc.) taxes are not avoided, but deferred to a later date, allowing the assets to grow more over time.

These solutions are custom-tailored to meet the needs of the individual. With the coming election, many people are starting to be concerned about the outcome and therefore the potential impact on their financial objectives.

By thinking ahead and trying to securing the assets in fully approved legal structures, one can achieve the main goal of protection.

Opportunities for diversification – and reducing risk – abound when sails are set for a globally-diversified investment portfolio. Jurisdictional diversification keeps a portion of the assets beyond a single country’s economic and banking system.

International diversification involves 50% of the world’s investment opportunities outside the United States. Currency diversification does provide an additional aspect to the portfolio, taking advantage of currency fluctuations.

When storms appear, e.g. trade wars, Brexit, political unrest and debt concerns, the markets can become short term choppy.  What most people don’t realize is that all of these events cause emotional reactions in the market, which are not based on fundamentals.

These are corrections, which are perfectly healthy components of a strong bull market.  What you need is a captain who understands this, and keeps the ship on its original course. In this case, not panic reacting and sticking with the long term goals. Forward thinking means getting prepared in advance, not having to scramble to safety when the storm hits.

The global strategy

The best way to navigate international markets is by working with an investment adviser that has in-depth knowledge about global wealth management, an adviser that has been through countless market cycles and thoroughly understands the fundamentals of global investing.

Often, investment portfolios of American investors are heavily concentrated in the U.S. But more than half of the world’s market cap lies outside the U.S. and it would be wise if investment portfolios reflected this reality. A globally diversified portfolio is better positioned to weather market ups and downs, and is often able to provide more stable returns over time since risk is spread among many economies, not just concentrated within the U.S.

“Opportunity does not waste time with those who are unprepared.” ― Idowu Koyenikan

For American investors, it isn’t a matter of market timing, but one of exposure. A globally-diversified portfolio helps to manage volatility, offsets losses and reduces overall risk.

But equally important, a portfolio with a good blend of domestic and international investments helps to drive long-term appreciation. With many of the world’s successful companies based outside the U.S., investors would be smart to include them in their portfolios.

Switzerland – a safe haven for international assets

In terms of security, accessibility, convenience, and peace of mind, Switzerland is an ideal location. Gone are the days of thinking of foreign banking as some distant, idealistic tax evasion scheme to hide from home governments.

On the contrary, holding an internationally-diversified portfolio or structure abroad is legal, moral and ethical when playing by the rules. It is a viable and sustainable option available to all wanting to take advantage of it.

Banking in Switzerland has a very long tradition and a fleet of highly knowledgeable and experienced international bankers and wealth managers. The main benefits of Swiss bank accounts include the low levels of financial risk and high levels of privacy they offer.

The Swiss economy is one of the most stable in the world, and has not been involved in any conflicts in hundreds of years. It simply makes good sense to hold assets in Switzerland.