Global Markets: When U.S. Economy Goes Down…

There are alot of investing opportunities outside U.S. In the recent years, alot of portfolio managers are recommending their clients to invest in emerging and other developed markets. The reason being obvious is the concern over things not going well in the U.S. Everyone talks alot about China and India as good bets in the emerging market category.
How does China and India perform when the U.S. economy is lagging ?
I believe not. China and India rely highly on the U.S. economy. With U.S economy and markets performing poorly impacts Chinese hardware and manufacturing exports and Indian software exports.

So who performs well when the U.S. economy is lagging ?
Few developed countries that still do well are: Australia, Ireland, Norway & Sweden. These countries do well because they dont rely too heavily on the U.S.

Other emerging market is Chile. They rely on exporting copper, similar to Brazil. China is still a good bet even though it is reliant on U.S. Vietnam is also gaining alot of interest from investors. Spain also holds alot of promise.

Rule of thumb: While investing in foreign markets, there is always going to be some surprizes and disappointments. This has to be always taken into consideration beforing investing your money in those markets.

Another good way to get started by investing in foreign markets is buying Exchange Traded Fund (ETFs). If you do not understand what are EFTs read here –> EFT explained or wait for my upcoming post on EFTs. :))

Some of the EFTs i recommend are

  • iShares MSCI Australia Index Fund EWA
  • iShares MSCI Sweden Index ETF EWD
  • Irish Investment Fund Inc. IRL
  • iShares MSCI Hong Kong Index Fund EWH
  • iShares MSCI Spain Index Fund EWP
  • The India Fund Inc. IFN
  • iShare FTSE China 25 Index FXI
  • not only that, but Sweden’s kroner was up 15% in 2006 against the dollar.

    i put a little bit of cash in Australian dollars. atleast the price of my next vacation is “fixed”.

  • sJ

    There are alot of good investment options outside U.S, but somehow alot of Americans are unaware about them.

    South America, Australia and Asia markets are growing super fast…