Attention All Overseas Investors: How To Multiply Your Return From Our Investment Products

Buy into the weakness of the pound NOW to increase your long term investment returns

Dear Reader,

There is a simple fact...

If you live outside of the UK, investing in UK assets now is cheaper than it was a year ago.

The Stanley Gibbons "5 Year Guaranteed Minimum Return Investment Contract" now offers the opportunity for even better returns.

Buying into a weak pound is no different from buying something offered at a discount. You get the same asset for less money.

The Complexity Of Exchange Rates

The factors that influence currency exchange rates between countries are complicated and diverse... I have no idea what exchange rates will be 5 years from now.

Investors who think they can predict long term currency trends are either delusional or incredibly arrogant.

It is a bit like trying to forecast the weather for 14th November 2011.

But, there is one thing I know...

Today it is freezing cold, pouring with rain, and the wind is howling. I know that the odds are in my favour 5 years from now on the 11th of November the weather will be better than it is right now.

This mirrors the situation we have with the weakness of the pound against all other major currencies at this time. There is no doubt the pound could devalue further...

All the indicators at this time such as escalating national debt, recession and lower interest rates point towards a bleak picture for the British pound.

But... there are so many other factors that can come into play and so quickly too. In short, exchange rates are notoriously difficult to predict.

Bottom line - the pound is weak, it may get weaker, but, in the long term, history suggests that it will recover.

Crunching The Numbers

The charts below illustrate the 5 year history of the value of the pound against the US$, Euro, Japanese Yen and Hong Kong $:

The red line indicates the 5 year average exchange rate. The picture portrayed is clear: The value of the pound has "crashed".

The table below illustrates the fall in the value of the pound over the past year...

	£	US$	Euro	Yen	HK $
November 2007 (average for month)	1 =	2.07109	1.41079	230.047	16.1081
11th of November 2008 (date of writing)	1 =	1.48136	1.16749	143.569	11.4879
% drop in value		28%	17%	38%	29%

The fall in value of the pound in such a short space of time is truly staggering. The question is... how much of the devaluation is the result of a loss of confidence in the UK which is an inherently fickle factor and how much is based on real fundamental economics?

How This Can Work For You

If you take out an investment contract with Stanley Gibbons, we currently guarantee you a minimum annual return of 5% on a 5 year contract. This means that if you take an investment out with us today for a term of 5 years, we guarantee you a return of at least 25% in 5 years time.

When you consider the interest you earn from a bank savings account today, this in itself is an extremely competitive return. Now let me demonstrate how your return could be even more...

The one caveat I wish to insert is that investors need to form their own conclusions on where they think the pound will be 5 years from now. I don’t proclaim to be any sort of expert on exchange rates. I simply express my own personal view here.

If you are of the believe that the UK economy is doomed to 5 years of deep recession, low interest rates and a worsening national debt and that our Government will be completely ineffective in managing its monitory policies then this is probably not for you.

If, however, you believe, like me, in the resilience and fighting spirit of Great Britain then you will expect that the position 5 years from now will be better than it is today.

The use of an example illustrates how buying into a weak pound could work for you...

Let's take a US investor signing up to a 5 year contract today of £100,000. The additional investment return, when taking into account the potential recovery in the value of the pound could be:

Scenario	Initial investment (£)	Initial investment ($)	Minimum value in 5 years (£)	Minimum value in 5 years ($)	Return %
Pound reverts to 5 year average	£100,000	$148,136	£125,000	$234,349	58%
Pound returns to Nov 2007 rate	£100,000	$148,136	£125,000	$258,886	75%

Should the value of the pound revert to its 5 year average against the dollar, the 5 year return would increase to 58%. That’s more than double the original return.

Taking a more optimistic scenario, should the value of the pound return to the rate in the month of November 2007 the 5 year return would increase to 75%.

I can't offer any guarantee that the value of the pound will increase in 5 years time. That is outside of my control...

But, on the basis that no one can accurately predict where the pound will be 5 years from now, the argument still stands that when the pound is as cheap as it has ever been in recent years, the odds are certainly in your favour that it will be worth more in 5 years time.

Another way to look at this...

Consider what the odds are that the pound is worth 25% less than it is today against the odds that it is worth 25% more...

A further 25% fall would suggest that £1 would only buy you US$1.11. To my knowledge, that's never happened before - a brave bet. An uplift of 25% would bring the rate back to where it was 3 months ago. So, going back to the weather analogy, what is a more likely scenario: a meteorite striking the Earth 5 years from now or weather slightly better than it is today?
 
I think that this is the perfect timing for anyone not yet invested in our guaranteed minimum return investment contracts to get in now to enjoy an effective discount due to the unusually low value of the pound against all other major currencies.

I would also suggest that existing investors use this as an opportunity to top up their investment at these levels and benefit from the potential returns illustrated above.

As always, I leave you in the capable hands of our Investment Director, Adrian Roose, and suggest you contact him today before on:

+44 (0) 1481 708 277
email investment@stanleygibbons.co.uk
TOLL FREE from the USA 1 866 644 6146

Don't just sit there and watch inflation destroy your wealth as money festers in low interest bearing bank accounts. Take action today and protect the value of your cash.
 
Sincerely,

Mike Hall
Chief Executive
The Stanley Gibbons Group

PS. Any problems? You can e-mail me at: mhall@stanleygibbons.co.uk. I am always interested in any feedback you may have on our investment services, both good and bad.