History shows it has never been a smart idea to bet against the culture of American entrepreneurialism. We have consistently shown the capacity to innovate and get the job done.
History aside, the naysayers continue to persist. A recent column in the Economist magazine ranked the 10 places most likely to provide a newborn baby with a peaceful and prosperous life. The U.S. didn’t even make the list (Switzerland was first if you’re wondering).
We undoubtedly have our issues. The economic strain of the aging baby boomers, combined with our huge public debt burden, is likely to suppress growth in the U.S. for some time. And no one could characterize our national political leadership as competent, but was it ever?
Once again, however, it has not been a good idea to bet against the ability of the American people to sustain our prosperity. We will survive and likely thrive.
But while I certainly would never bet against America, we certainly don’t need to limit our investment strategies to opportunities at home. The truth is other nations and economies present the potential for greater growth, and bonds in some other nations pay higher yields as well. In this new global economy we need to be open minded about opportunities around the world.
Now to be fair, investing internationally presents a good number of special risks. I’ve seen overseas markets sell off overnight as governments change tax laws on a whim, and I’ve seen great foreign stocks dive due to distant elections not even on my radar, not to mention currency and geopolitical concerns.
The story, however, remains attractive, especially in world’s emerging economies. A few weeks ago I mentioned China, but other nations in my opinion offer even more attractive opportunities.
While I would avoid Brazil for now, low debt levels, a strong banking sector and rising consumer confidence put Mexico on my list.
Indonesia, Thailand and Vietnam are benefiting not only from growth in China but from growing domestic demand and internal economic reforms.
Poland and Turkey both present strong opportunities for growth, and because both nations maintain their own domestic currencies they are somewhat isolated from problems with the Euro currency.
The really great news is Exchange Traded Funds (ETFs) now enable individual investors to access all these foreign market opportunities in a way that is flexible, low cost and easy.
The evolution of investment strategy due to these products makes it a great time to be an investor. Now more than ever, the world truly is our oyster.