The income from international investment funds have earned much went through the U.S. funds in recent years. As a result, there was a deluge of money flooding into these funds were. Is this the tech bubble again in 1999 all over again? Read on to find out.
Investing in technology stocks was the big thing in the late 90s. Internet start-ups that did not lift over a billion dollars in sales in an IPO. The value for the company was unheard of. AnyonePriceline.com remember? In 1999, the stock hit a high of about $ 300. A few years later it was trading at $ 5 per share. The same will happen with international stocks?
The short answer is no. Investments in foreign companies have not reached the frenzied pace seen in the tech bubble. In addition, there is a reason for carrying out overseas markets as well. It is important that you understand the underlying trend, so that you can properly associate the location of international investment have in yourPortfolio.
My wife and I recently returned from a brief trip to Cambodia. My experience here has me a greater understanding of and understanding of the development under way in Asia.
Cambodia is a very poor country. The average annual income per person is $ 2,000. And they are still responsible for atrocities of the Khmer Rouge in the late 1970s when it killed 2 million people. Now, 40% of the population aged 15 years.
The human spirit is the sameoverall. Ambition and attributes are not American, they are fundamental to human nature. And that is what I saw in Cambodia. Many are working to improve their own lives and those of their families. The Commerce means.
Cambodian wages are very low, as foreign money floods into the country. Garment factories are built and employ thousands. This causes land prices to double and triple in value. Family rice cakes are now selling for tens of thousands of dollars. Their salecompletely changed the lives of this family.
Every time they buy a car and at home. You buy furniture. The money trickles through the economy, raising living standards every step of the road. Multiply the view of thousands upon thousands, and the impact it has.
The capital of Cambodia is Phnom Penh. Exactly 5 years ago, many of the roads were not even paved. Now they are. New roads are built, and hydro-electric dams are being planned.
Cambodia is only aExample of what happens in countries throughout Asia. In China and India alone there are more than 2 billion people. Most of them lived in poverty all their lives. But that's changing. The standard of living rises.
Will this growth continue forever? No, but I think it will take a decade or longer. The growth rate is not constant. It is just as it cycles in each economy. There's no denying the trend, though.
What doesdoes this mean for your portfolio? I believe that many investors will have invested a substantial part of their portfolios outside the United States. Our economy has been growing about 3% per year. China and India economies are growing at 10% per year.
Traditionally, experts have suggested that 10-15% of the portfolio is invested internationally. Now some people think 25%. I think it should be higher than that.
The problem is that you can not just throw money into aOverseas mutual funds and forget about it. These markets are very volatile. The Chinese market fell by almost 10% in a single day this year. It is important that this money is well invested, that they will be closely monitored and that are the strategies to reduce the overall risk.
That's what I've done in the books of my clients in the last year or so. Some of the shares, which have developed very well are Bayer (BAY), Siemens (SI) and Bunge (BG). There are investments inCanada, Europe, Russia, Israel, Brazil, Australia and across Asia.
The targeted companies will benefit from these trends is more than just buying an index. If they compensated with other income-oriented investments and loss-limiting proprietary strategies, the result is a portfolio that is intended to more than a potential for growth have been concentrated only in the United States.
It is important that you have money invested outside the United States. The growth in emerging markets such asChina and India is not a fad but a trend that could last for decades.
National syndicated financial columnist and Certified Financial Planner ® Jeffrey Voudrie provides select personal, in-depth money management services and advice to private clients in the U.S.. He will answer your financial question - FREE at http://www.guardingyourwealth.com.
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