One thing the 21st century has proven so far is that when it comes to finances even the blue chip approach can’t always be relied upon. With globalization never far from the headlines, the world of commerce is now an international affair. Investment opportunities can appear in unlikely locations, and overseas industries and markets are often where smart money goes.
With this in mind, many retirees look towards trusted companies such as Fisher Investments for guidance on the best investment portfolio opportunities outside of the USA. Let’s check out some prime opportunities below…
Emerging markets
So called Asian tiger economies have been growing in importance on the world financial stage for the past twenty years. China’s growth has seen annual increases for even longer, and now both China and India are the undisputed heavyweight champions in the region. Even with the huge leaps these economies have taken, the potential for further growth is clear. Output per person in the U.S. is around $48,000. In China, it is $8,000 and in India only half that.
Closer to home, South American countries are no longer no-go areas for investors who are wary of taking risks with their hard-earned savings. Probably the most successful of all is Brazil, whose place along with China and India as a BRIC country, reflects its newfound status as a serious world class economic player. The country’s economy is currently the world’s eighth largest (seventh largest by GDP), according to the latest IMF figures.
Domestic multinationals
One way of becoming involved with overseas investments without feeling as though you are throwing all caution to the wind is by using U.S. based companies that have a multinational aspect. Fisher Investments evaluate global markets and encourage investors to look outside of the US for viable opportunities. Whatever your net worth, Fisher Investments can help with risk-avoidance and sensible strategies to follow, and often the best way to do this is to invest in what you know.
U.S. businesses that trade on the international stage include some of the biggest household names. By buying individual stocks or becoming involved in actively managed mutual funds, you can get a slice of the overseas action. By sticking with U.S. only investments, you mitigate against one of the biggest risks to the success of oversea investments, which is the volatile nature of international currency exchange rates.
Europe
Many European countries have a long and trusted commercial history when it comes to trading with the U.S., and their money markets are among the oldest and most established in the world. Those who like to dabble in stocks and shares might be advised to look across the Atlantic.
Many professional investors consider Europe the undisputed centre for global finance, and the largest stock exchange by market capitalization can be found in London. The London Stock Exchange has origins that stretch back to 1571, and commodity trading began there in earnest in 1698. The LSE as it is known today was finally founded in 1801.
With several different markets, there are various kinds of opportunities for investors based anywhere in the world. The Premium Listed Main Market is used by the biggest companies, and the Alternative Investment Market (AIM) deals with smaller up and coming concerns.
Pitfalls and dangers
Of course, as with all but the most rock solid investments, overseas dealings can carry risks and dangers. Apart from the previously mentioned exchange rate worries, the way that emerging markets embrace free-market ideas means that reward and risk often come hand in hand.
It is best to remember that because developing countries are often so dependent on exports, the knock on effects can be dramatic if larger economies slow down. Socio-political concerns can also play their part, from the effects of social unrest and instability to state-owned banks that manipulate currencies and credit.
Home or abroad?
When it comes down to the bottom line, there is no lack of overseas opportunities for U.S. investors operating on all levels. Because there are many variables that do not apply to domestic dealings, taking professional advice can be the key to success. The faster a foreign country is growing its economy the greater the potential returns, but the long term outlooks are often hard to predict.
As with most investments, the balance between the lure of a quick buck and the confidence from a blue-chip long term sure bet apply to overseas opportunities as much as they do to those at home in the U.S.