October 23, 2014

Freedom Investing

Every year the Heritage Foundation evaluates all the world’s countries using their Index of Economic Freedom, where a high score correlates to nearly every positive measure of a country. In 2002, David John Marotta started following the returns of an investment portfolio based on economic freedom, which he later wrote about in Foreign Freedom Investing 2008. Now, he's concluded very definitely that freedom matters even in your investment portfolio.

AAII 2014

David John Marotta presenting

The articles associated with David John Marotta’s presentation at the DC Metro chapter of the American Association of Individual Investors.

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Freedom Investing Since 2000

Freedom Investing 2000-2016-06

Recently we did an analysis of the returns of the MSCI Country Specific Indexes

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The Wealth Of Nations Is Their Freedom

Berry Hard Work

“When institutions protect the liberty of individuals, greater prosperity results for all.” – Adam Smith

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Freedom Investing Beats EAFE Index by 3.92% Annualized Over Past Decade

Freedom Investing 2014-06

Over the past decade the economically free countries have an annualized return of 11.34%. The S&P 500′s annualized return was 7.78%.

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Microfinance: Loans That Change Lives

Kiva: Loans that change lives

With as little as $25 you can begin loaning money to developing world entrepreneurs.

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Economic Freedom Matters 2014

Wall around Wall Street

Economic freedom enriches society, lifts the poor out of poverty and respects the agency and dignity of human choice.

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Freedom Investing Over The Past Decade

Freedom Investing 2014

The portfolio of the five freedom countries has an annualized return of 11.06% over the past decade.

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Marotta’s 2014 Gone-Fishing Portfolio

Sunset fishing

A gone-fishing portfolio keeps investing simple.

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Marotta’s 2013 Gone-Fishing Portfolio Review

Fish Measuring Station

A review of last year’s 2013 gone fishing portfolio returns.

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Bitcoin Trashing Makes The Case For The Gold Standard

Slack Palm

A return to stable money would signal the death of the bitcoin and other stores of value used as hedges against dollar mismanagement.

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Marotta Featured in Advisors’ Top 10 Investment Ideas for 2014

Advisors' Top 10 Investment Ideas for 2014

Economic Freedom is a good investing strategy.

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Countries with Economic Freedom – July, August, & September 2013 Returns

Countries with Economic Freedom - July 2013 Returns

We recommend investing in countries which are high in economic freedom and low in debt and deficit.

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Northern Europe Performance – September 2013

NEurope_perf_201309_t2

Northern European countries averaged 6.23% in September 2013.

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Marotta’s 2013 Gone-Fishing Portfolio

Gone-Fishing 2012

A gone-fishing portfolio has a limited number of investments with a balanced asset allocation that should do well with dampened volatility. Its primary appeal is simplicity. As a secondary virtue, it avoids the worst mistakes of the financial services industry.

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World Monthly Returns Index

The blue marble of earth 2007

Some of the monthly commentary on the returns of global investments.

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Foreign Freedom Monthly Returns Index

Free Countries

Monthly commentary on the countries ranked high in economic freedom.

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Countries With Economic Freedom Monthly Returns Index

Free Countries

Here are some of the monthly returns for countries high in economic freedom.

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Bucket List: Saving & Investing

Flower Buckets

In addition to emergency savings and retirement saving, you should also stash away 10% or so for long-term investing. Let the magic of compound interest make you money.

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Government Regulations And Compliance Do Not Make Us Safer

Milton Friedman Watercolor

The coercive power of government is more dangerous than the free market. Special interests use it to circumvent both the law and economics.

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Radio: The Importance of Property Rights

Marotta on the Radio

David John Marotta was interviewed recently on radio 1070′s WINA Schilling Show discussing property rights and their importance for a free society.

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Financially Savvy Kittens on Freedom Investing 2013

EconomicFreedom_t

This kitten invests in countries with economic freedom. Be more like this kitten.

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Dwight D. Eisenhower on tax cuts and a balanced budget

Dwight D. Eisenhower

“Until the deficit is eliminated from our budget, … there is no end to inflation; there is finally no end to taxation; and the eventual result would, of course, be catastrophe.”

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What Is Rent-Seeking Behavior?

Taking money from the ballot box

Studies suggest that $1.5 trillion is wasted on public sector rent-seeking.

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Encourage property rights, not democracy

Greece v. Chile in Economic Freedom

Even if democracy is the principal objective, encourage the rule of law.

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The Effective Rule of Law Propels Prosperity

the-effective-rule-of-law-propels-prosperity_t

Property rights are among the characteristics most correlated with high levels of per capita gross domestic product (GDP).

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Are Property Rights Human Rights?

All men are created equal

Does a property owner have the right to use and dispose of his property as he sees fit even if that means he is being irrational, arbitrary, capricious, even unjust?

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AAII 2013

David John Marotta presenting AAII 2013

Follow-up information for 2013 AAII presentation “Dynamic Portfolio Construction in the Context of Comprehensive Wealth Management.”

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The Ring of Fire – Part 2

Ring of Fire of countries high in debt and deficit

“Unless we begin to close this gap, then the inevitable result will be that our debt/GDP ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow, and the dollar would inevitably decline.”

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Vote Marotta As the World’s Next Great Investing Columnist on WSJ’s MarketWatch.com

Next Great Investing Columnist

MarketWatch is seeking a top-notch writer who will bring a fresh perspective on money to the world’s investors. We believe that fresh perspective ought to include the idea of freedom investing.

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How are foreign stocks doing compared to stocks in the United States? Fall 2012

The United States of America

Sometimes the medium term trend seems to weigh more heavily in our minds than the long or short term trends.

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Freedom Investing worth 4.3% over the last twelve months

freedom-2012_t

Countries are constantly in flux, and with all the noise of the markets, it is easy for the noise drown out the signal.

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How is Freedom Investing working out?

Freedom through 2012-06-22

How the five countries with the most economic freedom (Hong Kong, Singapore, Australia, Switzerland and Canada) and Emerging Markets have been faring in comparison to the EAFE Index?

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Marotta’s 2012 Gone-Fishing Portfolio

Gone-Fishing 2012

A gone-fishing portfolio has a limited number of investments with a balanced asset allocation that should do well with dampened volatility. Its primary appeal is simplicity. As a secondary virtue, it avoids the worst mistakes of the financial services industry.

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10-Year Freedom Investing Returns

Freedom 10yr 2012

Freedom scores ranged from #1 in freedom Hong Kong at 89.9 to #92 ranked mostly unfree Italy at 58.8.

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5-Year Freedom Investing Returns

Freedom 5yr 2012

Over the past five years, countries with the most economic freedom averaged annual returns just below emerging markets.

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Sovereign Debt and Deficit by Country

Soverign Debt and Deficit by Country 2012

Sovereign debt and deficit weigh most heavily on a country’s level of government spending, one of the ten components of freedom in the Heritage Foundation economic freedom study

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3-Year Freedom Investing Returns

Freedom 3yr 2012

We believe this is one of the times when your asset allocation should tilt foreign and overweight the handful of countries with high economic freedom.

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New Zealand: Economic Paradise

New Zealand

New Zealand, the fourth highest country in economic freedom, joined the United States with positive returns for 2011.

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1-Year Freedom Investing Returns

Freedom 1-year 2012

The equation of the trend line shows that every point on the freedom index was worth 0.36% annual return over the past year.

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Freedom Investing 2012

freedom-2012_t

Now at year end, I will review how freedom investing fared in 2011 and in the decade since 2002.

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Debt, Uncertainty and Volatility in 2011

2011 in Review

The world markets groaned as the burden of the rising American debt and the European deficit weighed down more productive countries.

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Market Timing Test ($ ?s)

$ Questions

Q: I have put my investments in bonds until this global economic crisis settles down and the economic woes of the European Union subside. Do you have any suggestions for indicators that I should look for to get back in?

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Ratio Of Takers To Givers Reaches A Tipping Point

Tax riding for free

This is what makes the stock market in some countries better than others. Make sure that you understand freedom investing for your portfolio.

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This Time is (Not) Different

This Time is Different

Growing investor despair that somehow we have entered into a new era in which individual investors can no longer make money in the markets is an overreaction to the headlines.

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Libertarians Should Invest More Down Under

Australia

Libertarians and economists both recognize that countries with more economic freedom experience higher gross domestic product (GDP) growth. That growth translates into higher stock returns for investors savvy enough to look for governmental fiscal restraint rather than government stimulus.

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Freedom Investing

Free Countries

Given the dangers of worldwide sovereign debt, this may be one time when investors should continue to tilt foreign and toward specific countries.

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Watch Milton Friedman’s “Free To Choose” PBS Series for Free

Milton Friedman Watercolor

The legendary PBS TV series “Free to Choose” (1980) by Nobel Prize-winning economist Milton Friedman is now available on Google Video for free (by courtesy of the Palmer R. Chitester Fund).

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Global Fixed Income (International Bonds): Hedged or Unhedged?

Hedged International Bonds

International bonds now make up more than 35% of the world’s investable assets, and yet many domestic investors have little or no exposure to these securities.

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An Overseas Gone-Fishing Portfolio

An overseas gone-fishing portfolio

Even in our gone-fishing portfolios we suggest investing more overseas than in the United States. For most investors, foreign stocks will be their largest and most important allocation. Including the right mix of foreign stocks will help you relax and go fishing no matter which foreign seas are in turmoil.

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Continue to Avoid the ‘Ring of Fire’ Countries

ringoffire2011_t

Americans seem to be divided on the importance of raising the U.S. debt ceiling. Regardless of your personal politics, avoid investing in countries that cavalierly allow their debt and deficit to balloon.

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