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International Investments



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International stock markets and stock market trends

International Investments

Upside Down Trends

International stock markets and stock market trends

By
Gary Scott

International Investments change all the time. We should never forget to look for, accept, adjust for and even embrace change.

Our recent major and emerging equity market updates should give us a moment to pause. Think how the investing world has changed. Emerging markets used to be risky. Now they regularly outperform what used to be the good, safe, major markets.

This year countries we used to deem high risk such as Egypt and Jordan have helped investors double their money in less than a year.  They have both risen over 100%.

Seemingly safe markets like the United States (up 1.1%) have lost purchasing power when adjusted for inflation.

This has been the case worldwide. Michael Keppler’s top value major market strategy has gained 6.5% for the year while his top value emerging market strategy is up 30.8%.

We even have to worry about Blue Chips such as General Motors going bankrupt!

I was especially jolted into re-thinking change while recently reading a local Ecuadorian newspaper during President Bush’s visit to Argentina.

There was the normal Yankee bashing as 40,000 demonstrators protested the Bush’ administration’s bullying stance. Nothing much new about this.

What was fresh and should have been clear earlier was the new Latin feeling that Bush is no longer a player. What the rest of the world is realizing is that the United States is out of money and deeply in debt. Latin countries are depending less on US business because they do not believe that the US has it to give. 

Latin America is refocusing its efforts and build bridges with places like China and India instead.  This new ideology is rearranging my view of how the global economy may evolve.

Previously my thinking was based around the belief that three economic zones develop, the Asian zone led by Japan, Europe (led by Germany) and The Americas led by the US. 

Now I wonder. This feeling of change was enforced in other ways on the same trip. Two European bankers were there helping us. These are sharp conservative, rational, well to do business people. They are not radical by any stretch of the imagination. I mentioned to them that Delta Airlines was planning on adding a flight from Atlanta to Quito Ecuador which would save them quite some time getting from Europe to Ecuador. They currently fly to Amsterdam, then the Netherlands Antilles and finally onto Quito, a trek that takes them 24 exhausting hours.  “We never fly though the US anymore,” was their reply. “It is way too much trouble for non Americans to transit there.”

What struck me most was the way these very sensible people said this so matter of factly. They had struck the US off their list of places to fly through and seemed a bit surprised that I should even think otherwise.

About the same time I was reminded of change when reading how many of the world’s largest banks Deutsche Bank in Germany, American Express in the US and Barclays in England for example now have smaller market capitalizations than China Construction Bank, which following its initial public offering October 27, 2005, is worth $66 billion. This was the largest global flotation in the last four years.

All this certainly has me rethinking. The fall and decline of the US Empire may be further along than we know. Perhaps or perhaps not. We all have to guess about what change is coming. All we can really know is there will be change.

Maybe these coincidences are just little trickles. Yet tiny streams have a way of merging and suddenly becoming bold creeks and then roaring rivers. So be ready for change.

I love the United States and choose to spend a lot of time here. Yet I am happy that Merri and I also have a home in Ecuador. Life is wonderful in both places. Having two homes gives us more flexibility (not to mention more sun in the winter).  More importantly, living in two countries and traveling gives us expanded horizons and this helps us never forget, to accept, adjust for and even embrace change.

You should as well and…enjoy good investing!

Gary

International stock markets and stock market trends

 

International stock markets and stock market trends

 

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