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- Published on Tuesday, 18 September 2012 14:34
- Written by Sara Nunnally, Editor, Inside Investing Daily
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Yesterday was the last day of our exclusive "Roadmap of the New America" conference. The cameras have been turned off, planes have been boarded...
At least, that's true for most of the speakers and attendees.
Our own Aaron Gentzler is taking a few days off to spend with his family, and I'm filling in for him.
I want to share with you a bit of the conference that nobody has seen... not even the attendees.
My presentation.
Less than two weeks before I was due to fly to Las Vegas, we had a family tragedy, and I was unable to fulfill my obligation to speak.
For those of you at the conference, I have no doubt that some of my presentation information was passed on to you -- check your flash drives for my detailed notes -- and in keeping up with our roving reporter's messages, I know that the topic I chose was both timely and well supported.
Karim Rahemtulla, editor of the Small Cap Alert and author of Where in the World Should I Invest: An Insider's Guide to Making Money Around the Globe, suggested investors look offshore for big growth stories... places like Vietnam, which you've heard me discuss here before.
It's no surprise, though, that top analysts are telling investors to look offshore.
But many U.S. investors might be wary or downright scared to move their money out of traditional and safe, easy-to-access U.S. investments like bonds and mutual funds.
Well, my research says that's holding you and your portfolio back.
You see, the world is changing. The U.S. might still be top dog in military might, but economically? My research puts us at about No. 14.
I'm sorry if that offends anyone, but it's time to look the numbers right in the eye.
They're telling the truth.
And they're saying that our public debt is at 94.4% of GDP. That our corporate tax rate is at 35%, and our GDP growth is ranked 169th in the world.
We are far from the top.
Money is shifting, and it's moving from wealthy nations like the U.S., Japan and most of Western Europe to new markets like China, India, the Middle East and Latin America.
This is the natural course of things. Consider the money that flowed onto U.S. shores and out of Old Europe. Where there's opportunity, money always follows.
This "money shift" is so important. It represents an opportunity of epic magnitude.
That's not hyperbole, either.
Consider this, from Jim O'Neill, the man who coined the term "BRIC" and introduced the investment world to one of the biggest -- and most profitable -- strategies we've seen in emerging markets.
All four of the BRIC countries have exceeded the expectations I had of them back in 2001. Looking back, those earliest predictions, shocking to some at the time, now seem rather conservative. The aggregate GDP of the BRIC countries has close to quadrupled since 2001, from around $3 trillion to between $11 and $12 trillion. The world economy has doubled in size since 2001, and a third of that growth has come from the BRICs. Their combined GDP increase was more than twice that of the United States, and it was the equivalent to the creation of another new Japan plus one Germany, or five United Kingdoms, in the space of a single decade.
That is some incredible growth. And while the BRICs aren't done growing, there are some new markets waiting in the wings that could give investors even bigger ROIs.
For traditional investors, I get it. This whole scenario seems scary. Why would you want to put your hard-earned, beaten-down money in a new emerging market like, say, Bangladesh? Or Vietnam?
The growth aspects are undeniable.
Over the past five years, Bangladesh's main equities index has climbed 79.9%. There are lots of reasons to like this country's numbers. But what really matters to investors is how safely and easily they can invest in this growth economy.
For some new markets, it's very easy. For some, the opportunities are just starting to appear. There are a number of new ETFs for growth markets, and there are even some ADRs that you can pick up right here without any fancy accounts.
But here's something to keep in mind. Check with your broker to find out if you can invest on the London exchange, the German exchanges and the Hong Kong exchange. These are major financial hubs that are often the first place an emerging market's companies look to list internationally.
Access to these markets will give you closer access to growth markets around the world.
And lastly, be ready for a lot of surprises from growth markets. Places like Iran make the list (its market has climbed 155% in the last five years), as do places like Mexico, with its high foreign direct investment and industrial growth rate.
The numbers speak for themselves, and if you follow the money -- and the growth -- you'll find a lot of opportunities in global growth markets.
Happy Investing,
Sara
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