Begin Your Global Investing Small

Making a real estate investment in a foreign country could easily become a “learning experience”. The profits could be enormous. That is because the risk can be enormous as well. The global financial crisis seems to be abating a little, so maybe it is time to get your feet wet. The trick is to get your feet wet without drowning.

There is an easy way to get started with a minimum of risk. Unfortunately the upside potential is less than an active real estate investment. The vehicle is foreign stocks. Almost all of the online brokerage houses has some type of “Global Account” where trades can be made in local exchanges and local currencies. After thoroughly researching some countries as if you were going to make a large investment there, choose your investment target country. This is the most important step.

Watch the market in that country or examine the historical data. There are two ways to go from here. The easy way is to buy an ETF (Exchange traded fund) or REIT (Real estate investment trust) that invests in that country. The second is to build and imaginary portfolio to practice investment skills. You could even do both. Buy the ETF or REIT and practice individual stocks until your imaginary portfolio outperforms the ETF. At that time it may be good to put your money into the portfolio that you handle yourself.

In many cases there will be foreign tax regimes to negotiate and emerging markets can be volatile. After a year or two, you should be familiar enough in the market to make a direct investment. You will have limited your loss to a predetermined amount.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

Positive or Negative...It's a Point of View

Bernanke has signaled that QE may be coming to an end. This is being called the Taper. The stock market is upset. They think interest rates will go up (they already are). This will make investment capital more expensive. It will move money from equities into bonds. This is not all bad.

Many fixed income people have been suffering from low interest and low bond yields for several years. This will give them money to spend, which will help retail. It will also reduce their dependence on social programs and charity. It could make it a little harder on home buyers, but it may cause some people to be more open to owner financing. It may even cause investors to put properties on the market to turn rent into mortgage income.

In a sense the central banks are saying, “We can do so much. The politicians need to do their part.” Unwillingness to compromise is ruining the economy. It is a shame that congressmen are not paid on a performance basis. Most of them would have to make a contribution.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

The Rise of the 4th Reich

Two world wars couldn’t do it. Germany’s attempts to rule Europe failed both times. Finally, by way of the Euro, it seems as if they have made it. Austerity, which works fine in Germany, has strangled the rest of the countries in the Euro. Now Germany is suing the ECB (European Central Bank) to back off on quantitative easing, which is the only hope for many of the marginal countries and the economy of the rest of Europe.

After the 2nd world war, it was obvious that Germany’s industrial power house was so strong that they would soon out produce the rest of Europe. That would raise the possibility of a 3rd war. Europe had had enough. There were two choices. The Europeans could wait a few more years and have a German Europe, or they could put together the EU and have a European Germany.

Some economists say that the only way the Euro will work is with a true financial union. If that is achieved, Europe will be German in all but name. Who knows? They may even change the name a little further down the road.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

Balancing Resources

Do you remember your parents saying; “Turn out the lights when you leave the room”? Now the power companies say use CFC’s to save electricity. Hybrid and electric cars are supposedly reducing energy use and pollution. Where does that energy come from? A lot of it comes from coal.

Some of it comes from Nuclear and Hydro. It has been said that it requires more water to turn the light on in the bathroom than it does to take a shower. Maybe we are damned if we do and damned if we don’t. How can the economy, available resources and protecting the environment work together?

They probably can’t. Oil, Electricity & Gas have largely replaced coal and wood in much of the world as a home heat source. Are we really better off? What about the damages caused in the acquisition of these resources? We build modern cars that run on ethanol or electricity, using up our food and water. Where is the trade-off? The only real answer is to go nowhere, eat cold food and stay home in the dark with the television off.

David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

No Middle Ground

            The world’s political, social and economic middle seems to be disappearing.  In the USA the Republicans and Democrats take extreme opposite positions and refuse to budge.  Paraguay’s leftist president took the country into disaster.  After he was impeached, a staunch conservative took over.  Venezuela’s upper class was so abusive that they created Hugo Chavez.  You can’t get much worse than that.

            Austerity is a principle that should be practiced when times are good.  Instead, the government gets money and spends twice as much.  An example is the Bush tax cuts that led to our situation today.  Now our government, like those of Europe, is trying to cut all of their expenditures when they should be investing in infrastructure and putting people to work.

            The gini coefficient in much of the world is dropping.  Soon there may be no middle class.  When the middle goes away from any structure the entire structure collapses.  Are we headed back to the middle ages?

David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

Multi-party Parties

The world has laughed at Italy for being unable to form a government. Perhaps the in the USA we should be laughing out of the other side of our mouth. Or be crying as the case may be. Having only two parties, fairly equally balanced has led only to stalemate. With many parties and no majorities compromise is required to even rule. The possibilities of compromise increase on the events that matter to the populace.

Governments, political parties and businesses should have and adhere to a firm set of principles. They don’t need a firm set of attitudes. Hardening of the attitude is referred to by Wayne Dyer as psycho-cirrhosis. This is a killing disease. Absolutes are paralyzing government to the point of self destruction. If government were a business, it would be bankrupt. Not just because of financial issues, but because of unhappy customers.

Most politicians seem to be only interested in getting re-elected. This would not be all bad if it forced them to listen to their constituents. Unfortunately their constituency is not as important as their campaign fund. It seems that in most cases, the best funded candidate wins. If the NRA says one thing and the voters say another, the NRA wins.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

The Trap Snaps

An article on the Charles Schwab website this morning predicted that Europe was going into a depression. The only reason they are not already in a depression is that no one actually knows how to define a depression. One of the metrics is the unemployment. When one’s neighbor is out of work, that is a recession. When that same person is out of work, that is a depression. In many parts of Europe the unemployment is over 25%. The unemployment in some demographic groups is over 40%. A lot of people might perceive that as a depression.

In the “great depression”, there were rampant bank failures. The bailouts are the only thing preventing those failures now. The retirement systems in most European countries are absolutely ridiculous and should be reformed. Now is not the time. That money needs to go into the economy. Retired people spend money and don’t take up space in the workplace.

The German economy is tightly tied to the rest of Europe. Austerity is a way of life in Germany anyway. Imposing this austerity on the rest of Europe has cost Germany a big part of its market. Germany has the last successful economy in the Eurozone. When it crashes, the trap will snap.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

The Europe Trap (part II)

Hong Kong, like France, Germany and Britain, has an economy that is fully integrated into the world economy. They have a comprehensive social net to protect their citizens from financial discomfort, but they do not have reckless, foolish entitlement programs that burden the government. Argentina, while it has some international exposure, is a much more self-contained economy. They have an extremely high burden of entitlement programs. A person working for the government 1 day has earned a pension for life. Retirement age is very young.

When Argentina dropped its peg to the US dollar many Argentineans lost as much as 75% of their wealth overnight. Going forward they could take care of their internal obligations with devalued local currency. If Argentineans bought goods produced in Argentina they had inflation, but not as bad as that on imported objects.

The same thing would happen in the peripheral European countries. The real pain will come in decoupling from the Euro. Internal debt can be paid with depreciated local currency. Past international obligations are due in Euros. Many banks now offer accounts denominated in foreign currencies. These are backed by reserves in those currencies and can buffer the effects of inflation for local people.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

The Europe Trap

I can’t help but wonder if the European Union has totally lost its collective mind. A tax on bank deposits to save the banks! That can only cause a run on the banks. Then, there is this whole austerity thing when the economies need stimulus not an anchor. The government of the EU is destroying the economies of its borderline countries.


Italy, Greece, Spain, Cyprus and Portugal should get out of the Eurozone. Their problem is that they can’t because they need the bailouts. The European Union is an excellent idea. The Euro is only good for the strong economies. Britain should be in the Eurozone. The countries mentioned above should get out.

Hong Kong and Argentina provide excellent examples of the benefits and pitfalls of currency fixes. The Hong Kong dollar is pegged to the US dollar; so when the Hang Seng crashed, the entire Hong Kong economy did not collapse. The Argentine peso was tied to the US dollar and when they had problems, the dollar peg made things worse. Why does this happen? Come back and read “The Europe Trap part II)

David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/