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Shareware Overload Trio 2
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Shareware Overload Trio Volume 2 (Chestnut CD-ROM).ISO
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SWS.TXT
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1994-10-26
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Using Switzerland For Financial Privacy
Over the past 20 years world capital markets have
grown rapidly in size and importance. In 1970 total
world stock market capitalization was $935 billion, but
by 1992, world stock market capitalization was $9,320
billion. Markets in a number of countries have
delivered high-return performances recently.
International diversification provides more
investment choices than investing solely in any one
country. If you invest exclusively in one market, you
miss the opportunity to share in the potential growth
of some of the leading companies in the world.
A principal advantage of investing overseas is
diversification. A diversified portfolio gives you the
opportunity to enhance your overall return while
reducing risk. Trends in foreign stock markets
generally do not always correlate highly with bull or
bear market cycles in the U.S. stock market. While one
or more foreign stock markets may at any time be moving
in the same direction as its U.S. counterpart, longer-
term correlations are low. This means that
diversifying beyond a single market should reduce the
overall volatility of your stock portfolio over time.
Taken as a group, foreign stocks will generate
higher returns than U.S. stocks in some years, but not
in others. The important point is that U.S. and
foreign markets do not often mirror each other.
Therefore, combining U.S. with foreign stocks cushions
the investor's overall stock portfolio against the full
impact of potential down markets in one country or
another.
Switzerland has long served as a magnet for the
money of wealthy foreigners who perceive the world as
buffeted by over-taxation, over-regulation and
political turmoil. They are attracted, of course, by
the confidentiality and discretion that have been a
hallmark of Swiss bankers since the French Revolution,
when they offered financial refuge to French
aristocrats.
The principle of neutrality in Switzerland
protects all wealth, equally. This principle of
neutrality is important toward understanding why the
Swiss excel at the preservation of individual wealth.
Your wealth simply cannot, and will not, be held
hostage in Switzerland. By staying out of
international conflicts and maintaining strict
neutrality, Switzerland has become a refuge for capital
from all over the world.
Switzerland combines political stability with
political neutrality. This in turn has led to economic
neutrality. Switzerland has never imposed exchange
controls on capital outflows. No one who has invested
in Switzerland has ever been prevented by government
measures from taking it out again.
The strong Swiss franc is another reason for Swiss
financial stability. The Swiss franc is more than a
paper currency -- it is backed by gold. Swiss law
requires a minimum 40% gold reserve for every franc in
circulation. Actual gold reserves amount to more than
that, and at today's gold prices are actually many
times the value of the currency in circulation. There
is no other currency in this position.
In the 1930s, many other nations were creating a
distinction between deposit banks and investment banks,
and the Swiss legislature refused to follow that trend.
The Swiss opted to retain "universal" banking, or full-
service type banking, which means that your Swiss bank
can be a deposit bank, a checking account bank, a stock
broker, a commercial lender, an investment bank --
everything you need.
A new Swiss product, BankSwiss, combines a
brokerage account with a tax-free money market account,
allowing the investor to use the account to manage a
global portfolio.
SwissGold is a gold purchase program, allowing
investors to purchase and store gold through a Swiss
bank, obtaining the bank's best wholesale prices. Such
accounts may be used either for large one-time
purchases, or for monthly purchase programs which
provide the investor with the advantages of cost
averaging. Gold accumulation programs allow the
investor to enjoy all the benefits of investing in gold
without the responsibilities and costs of handling and
storage.
An accumulation plan is an organized method of
buying gold purely for the investment and inflation
insurance aspects of gold, and does not involve
gambling on coin collecting values, or other gimmicks.
It is designed to be more efficient and more economical
than buying gold coins for their bullion value.
Insurance companies belong to one of the most
important sectors of the economy in Switzerland. They
are also extremely conservative and safe. In 130 years
none have failed, a record that even Swiss banks cannot
match. Unique tax advantages combined with
conservative money management cause Swiss insurance
products to perform much better than one might expect.
A new Swiss annuity product (first offered in
1991), Swiss Plus, brings together the benefits of
Swiss bank accounts and Swiss deferred annuities,
without the drawbacks -- presenting the best Swiss
investment advantages for non-Swiss investors. Swiss
annuities are exempt from Swiss withholding taxes.
Swiss Plus offers instant liquidity, a rarity in
annuities. All capital, plus all accumulated interest
and dividends, can be freely accessible after the first
year. During the first year 100% of the principal is
freely accessible, less a SFr 500 fee, and loss of the
interest.
Upon maturity of the account, the investor can
choose between a lump sum payout (paying capital gains
tax on accumulated earnings only), rolling the funds
into an income annuity (paying capital gains taxes only
as future income payments are received, and then only
on the portion representing accumulated earnings), or
extend the scheduled term by giving notice in advance
of the originally scheduled date (and continue to defer
tax on accumulated earnings).
Although called an annuity, Swiss Plus acts more
like a savings account than a deferred annuity. But it
is operated under an insurance company's umbrella, so
that it conforms to the legal definition of an annuity,
and as such, compounds tax-free until it is liquidated
or converted into an income annuity later on. That
annuity income is tax-free in Switzerland, and in the
U.S. it is taxed in the same way as any U.S. annuity
would be, which defers all taxes during the
accumulation period.
U.S. purchasers of Swiss annuities are not
required to report them as foreign accounts on their
U.S. tax returns.
Information on all of the Swiss investment
products mentioned can be obtained from:
Mr. Jurg Lattmann
JML Swiss Investment Counsellors
Baarerstrasse 53, Dept. 212
CH-6304 Zug
Switzerland
telephone: (41) 42 26 55 00
fax: (41) 42 26 55 90; attn: Dept. 212.
Since 1974 JML have specialized in Swiss franc
insurance, gold and selected Swiss bank managed
investments for overseas and European clients. The
group has nearly 16,000 clients worldwide with
investments through JML of more than 1 billion Swiss
francs.