Monthly Archives

November 2014

Weed Out Your Turkish Stock Portfolio – Turkey ETF?

November 21, 2014
Turkey From A Glance regarding eft

Weed Out Your Turkish Stock Portfolio.

  1. How to weed - Through my years as an investor in stocks, including in Turkey, I have found that it is super important that when the overall market is rallying to take careful note of your portfolio. Look over every stock that does not go up on a big day and take a mental note. If this pattern continues on subsequent up days then lighten up on those stocks. For instance, if the market is rallying for several big up days and stocks in your portfolio are not rallying then you likely have a problem. Go through the stocks in your portfolio that are moving up and weed them out.

 

  1. Why weed? – Next time the market corrects you will likely see damage in those stock that failed to rally higher on big up days. This is a general investing concept you can use whether investing in a stock in the Turkish stocks or anywhere else. Typically stocks that can’t go higher in a big up day are telling you that there is information out there that you don’t know about yet. You may think you are more informed that other investors but typically the stock that can’t go higher has something wrong with it that you do not know about. Stocks stalling when the market is going up tend to get clobbered. This relates to an old concept of cutting your losses. This highlights some age old investing wisdom which is to cut your losses. Follow on Twitter cutyourlosses@cutyourlosses to emphasize the importance of all of this.

 

  1. Miracle Grow - The portfolio that is left over after weeding is typically high quality and acts like it has been fertilized. I have found that the weeded portfolio will tend to grow much faster without the weeds. The capital that was in the weeds can be redeployed into higher quality investments and those will likely perform better. This really reiterates a very important rule in investing which is to let your winners run.

P.S. Oh and one other tip: Alternatively, if you do not want to trade your stocks as an investor you can consider the Turkey etf. The ticker is “TUR”  which is high quality. I find it is low cost and a great altternative. I have done the research and have no affilaition with Ishares that created the TUR ETF. This etf should give you very solid exposure to the broad Turkish stock market.  Conveniently TUR trades in the U.S. markets. I have no affiliation with the etf but did the research and thought I should get the information out there for you! Happy investing :)

Should You Buy The “TUR” ETF?

November 21, 2014
Is Turkey The RIght Place To Invest?

Three Factors To Consider Before Buying “TUR” ETF.

  1. Lower oil – If oil stays low, then Turkey should thrive. Turkey greatly depends on oil imports. In 2014 the price of oil fell and Turkey’s balance of payments looked better. Low oil prices bode well for the future growth of Turkey. Low cost energy means lower production costs and energy costs thus helping to fuel GDP growth in Turkey. This also improves the Turkish balance of payments so that the country’s balance sheet looks better.
  2. Dollar denominated debt – Turkey has lots of dollar denominated debt which is more vulnerable with the increasing strength of the U.S. dollar. As Janet Yellen and the U.S. Fed raise interest rates in 2015 the dollar could continue to strengthen. Ironically, oil is also denominated in dollars so a rising dollar means lower oil prices and vice versa.
  3. Turkey’s central bank - Turkey’s central bank has room to continue to ease interest rates through its monetary policy. These lower interest rates can help spur the economy forward. Some countries like Japan have such low rates that they have no juice left to push the economy higher. Turkey on the other hand has this monetary capacity which can bode well for stocks if the central bank continues to ease.

In one’s investment portfolio allocate no more than 5% of your portfolio to a single country. We did research and found that Fidelity offers 25 commission free trades for ETFS. A responsible investor would build a portfolio of various country ETFs that one would  think might have potential in the future. Some other ideas for interesting countries include Thailand, Korea, Peru, and Greece.  Any way we hope our research has been helpful to you and feel free to contact us with your thoughts or questions.

What Is The Best Way To Invest In Turkey?

November 20, 2014
Investing in Turkey with and ETF

We Researched How To Invest In Turkey With A Skeptical Eye. So we looked at Turkey from a non biased perspective to try to come up with the best investment vehicles possible. We thought there would be several options, but we ended up finding out that just one ETF really dominates the space. The ticker is “TUR” created by iShares, which by the way we have no affiliation with whatsoever. The ETF was started in May 26th, 2008. We looked into the contents of this ETF and were impressed. Currently is has a broad mix financial stocks, telecom and consumer products. Some of the top holdings of the iShares MSCI Turkey ETF include the following: GARAN, TURKIYE GARANTI BANKASI A, AKBNK, AKBANK A, TCELL, TURKCELL ILETISIM, HIZMETLERI A, BIMAS, BIM BIRLESIK, MAGAZALAR A, HALKB, BANKASI A.  If you were anything like me, then you had never heard of many of these companies. So after digging deeper we found that we were woefully ignorant and should have known these companies. They are some of the heavy hitters in banking and telecom in Turkey. So despite the heavy weighting in financials we like this ETF. The fees are a little over .61% and again the ticker is “TUR.”

Warren Buffet and ETFs

November 20, 2014
ETFTurkey

Warren Buffet’s Recommendation: Recently Warren Buffet recommended putting one’s portfolio into ETFs. His reasoning is that most investors trade too much and get into and out of the market at the wrong time given their emotions. Buffet says that ETFs are low fee compared to other money managers.  I would agree, and further, I would add that most investment professionals cannot even beat the market. The opportunity cost of focusing your time and efforts on investing in stocks and then not beating the market is devastating to one’s productivity. Why not focus on ETFs instead? The Turkey ETF might be a great alternative if you want some exposure to Turkey.

Pros and Cons of Investing In Turkey

November 20, 2014
Pros and Cons of Investing in Turkey ETF
  • Pros – Turkey is well positioned between Europe and the Middle East for commerce and trade. Geographically, access to water gives Turkey special opportunity to conduct trade through shipping. Furthermore, the central bank has more cushion left with which to lower interest rates and effect monetary policy. The country has solid GDP growth.
  • Cons – Given that lots of the country’s debt is denominated in U.S. dollars and the dollar is strengthening, it may be harder for Turkey to pay off its debt. The interest payments need to be made in U.S. dollars. You see as the Turkish currency depreciates against the dollar then it becomes harder to make the payments.