Not sure if you have the reference in the title. It is my opinion on a semi-famous phrase of famed investor Warren Buffett. He once said about the poor economy ? (I?m paraphrasing here) is only when the tide is low (bad economy) you see who?s been swimming without a bathing suit.
You must love Warren sense of humor.
So to make his famous quote a step further, I see that the tide is changing. And now it?s time to hold on to your swimsuit. What am I talking about?
The fear is slowly being replaced by greed in the markets. This means we?re beginning to see the exchange of investment assets very conservatively and flow of riskier investments in higher performance. Get ahead of this wave of change will be critical to winning money.
So everybody has some questions, I?m sure. We will address some.
First, where is the money flowing?
This is easy. Just crack open your copy of Barron, the Wall Street Journal, or make a visit to your favorite financial website. Take a quick look at international markets. All last year, the table of global markets looked terrible. Not a single market, to ? not one.
What we see today?
See the results in these markets ? Caracas to 24%, 22% Tel Aviv, Taipei 25%, 45% Shanghai, Sao Paulo 21%. Another handful of markets are more than 10%.
This causes the loss of 11% in the Dow are sitting now look ugly.
Clearly some appetite for risk is back in the markets. Why?
Simply put, the fear is subsiding. It?s been a while since we had a company or government agency screaming the sky is falling. Banks make money again (at least some of them) and the amount of stimulus that pushed the global economy is amazing.
Just think about it. Would you rather invest in the U.S. economy, where growth is usually 2 or 3 percent a year, or if you put money into high-growth opportunities ? as China is growing at 9% or more per year. Of course, you want to invest for growth.
This ensures that the worst is over? No, of course not ? but we?re starting to see investors nibble on investments that will generate large profits if the worst of the crisis is behind us.
So, how can we take advantage of this change?
Well, once investors really believe that the worst of the recession is over, the money will come from the U.S. Dollar. Today, money is flowing into the dollar because of its safety. Once invested, be careful ?
The U.S. dollar is going to fall. A dollar is declining because prices move higher and inflation rears its ugly head. This can only be avoided if the Federal Reserve react fast enough (but that?s another story).
With the money from the dollar, the value of other currencies will rise. This will make international investments more profitable to all.
An easy way that can benefit is by investing in foreign currency. Yesterday I did a commercial service Currency Options Insider ? I?d like to share with you that collect, but would not be fair to paying subscribers.
So here?s another way. You can buy foreign stocks. As the U.S. dollarfalls in value, the relative value of these stocks will rise ? even if not move higher.
Now the selection of individual stocks can be a bit risky. That?s why we take the easy way. I prefer to invest in foreign ETFs.
Take a look at the iShares MSCI Emerging Markets ETF (EEM).
This ETF invests in a number of international companies ? who holds shares as Brazilian Oil Company (Brazil), Gazprom (Russia), and Chunghwa Telecom (China). In total, the Foundation holds shares in more than 340 companies from different ? especially in emerging markets. Trust me, it is difficult to achieve diversification as its own.
EEM is up 40% in recent weeks. Is trading above the 50-day moving average, which incidentally only upwards. It is also to reach its 200 day moving average. When you cross the 200-day moving average, is a great sign of the ETF may continue to rise.
Take advantage of the weakness that comes with the U.S. dollar. Now is the time to add an international component to your portfolio. Consider collecting the actions of the MA in any pull back. This is an investment that might work for the year ?
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Source: http://www.iscfdj.net/international-investing-can-be-more-profitable.html
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