| |
| |
|
Have You Ever Seen A Map of the World Turned Upside Down?
For those accustomed to viewing things a certain way, it is quite disconcerting. One almost expects the ocean to pour out. It just seems wrong. Yet, the way we view the globe is entirely arbitrary, based largely on the way we've always seen it. When we view things from a different perspective, it isn't difficult to come to different conclusions. Normally, when we have a clear perspective from our traditional vantage point, it seems pointless to view the world from a different perspective. However, when the picture we're seeing is cloudy and obscured, taking a different view is crucial. Otherwise, we are left guessing. Those who have been following this page in recent months may have observed beginnings of a sea change in focus. Events have been leading us toward a strategy that may seem surprising. A confluence of unexpected events sometimes leads the careful analyst to draw unexpected conclusions. If you follow the logic from past issues, however, you can begin to see the germination of these ideas. In recent months, we've addressed the importance of not following the crowd like lemmings over a cliff. We've discussed the rise of developing markets such as India and China. We've mentioned the weakening dollar and the Washington spending spree with overtones of a Keynes-inspired false recovery. As we plunge headlong into election season, we're all getting an opportunity to hear the economic strategy of the two leading candidates. If we put aside our preferences and partisanship for a moment, and simply reasons to vote for one or another candidate, the economic policies of both leading candidates leave much to be desired. Neither has a particularly coherent economic policy, and while both pay lip service, neither fully understands the importance of free, unencumbered markets. The result is a leadership that provides no encouragement to economic growth, regardless of the outcome of the election. As long as either Bush or Kerry wins, we have nothing to look forward to. It's not a great stretch to imagine an America adopting European-style protectionist legislation, and increasing regulation of business. This will slow our economy semi-permanently. Both camps seem to support this. Listening to our two leading presidential candidates, and hearing little objection from either congressional delegation, one can only imagine the worst. The "Reagan Revolution" is finally over. The movement toward freedom and away from regulation has come to an end. Positive reforms that haven't happened yet are unlikely to develop in the current environment. This pessimistic outlook may be overblown, admittedly. The U.S. economy has traditionally been able to grow through some rather restrictive regulation. However, a glance back at the lackluster growth of the 1970's gives a vivid illustration of how bad a mismanaged economy can become. At least we need to look at the U.S. in the same way we look at each country of the world. No longer can we invest here simply because it is "home". Instead, we need to look worldwide, and evaluate which nations are most likely to grow. If we take this approach, without regard for the "home team advantage", investing in the U.S. is still worth considering, but it hardly looks like the best place in the world to put our money. In fact, the fastest growth is likely where freedom is increasing, rather than where freedom is decreasing. Consider where we see the greatest increases in freedom worldwide. It clearly isn't here. With the Patriot Act and similar legislation, not to mention a quiet increase in business regulation, we're actually moving in the opposite direction. (The Patriot Act, contrary to popular belief, is not just about wiretaps, but also adds enormously unproductive paperwork and regulatory burdens for financial firms, among others. I encourage all readers to peruse this massive legislation before giving it your tacit approval.) Countries like China, where freedom is a relatively new concept, have the greatest chance for improvement, since they are so far behind. News that China's Minmetals plans to buy out Noranda, Canada's largest mining firm, is evidence of China's growing economic power. China is still problematic as an investment area, however, due to the government's willingness to crack down on the population, and the lack of a tradition of "rule of law". The recent effort of China Mobile to crack down on "misuse" of its cellular service by advertisers (under threat from the government) is proof positive that free markets haven't yet fully taken hold. Threats of invading Taiwan also don't engender confidence. Thus the risk is high for investing in China, and by extension in Taiwan. Still, the story is that investing is no longer focused in America, and there are other nations where opportunities are high, and risks are not. The recent election in Indonesia seems to be a positive omen for the future. We anticipate a more positive environment in that enormous nation. It may be one of the best places to look in the near term. Also, in the same region, Australia and New Zealand seem to be making more incremental improvements. India has great promise, despite continuing problems with corruption. Turkey's recent provisional acceptance into the European Union makes them a powerful possibility. The opportunity to jump headlong into a large market will provide a more powerful impetus than the drag on growth from the limitations on free markets that is the cornerstone of EU membership. Thus, the short-term growth will be high as Turkey rises to the level of the other members, but eventually growth will slow to the level of France and Germany, two of the world's slowest growing economies. Look back at the growth of Spain and Greece in the past when they joined the EU to see what to expect. For the moment, at least, we see great potential for Turkey. The key thought to take away is that the wise investor must begin looking beyond the normal borders to find the best opportunities. This doesn't suggest that we should disregard traditions of free markets and free minds. A culture that supports opportunity is still critically important. But we're seeing that culture beginning to develop in unexpected places, and seeing some decline at home. Thus, the time has come to add a new, more global dimension to our strategy. Opportunities may be better, and risks lower, in unexpected places. To send comments or to learn more about Scott Pearson's Investment Management Services, visit http://www.valueview.net Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Who Wants To Be A Millionaire? I am sure you have probably read about the power of compound interest. And how if you invested $10,000 at 10% return and let it compound for 50 years you would have a little over 1 million dollars. Why You Need To Buy and Sell Gold Coins (Part 2) How to Collect Rare Coins For Fun and ProfitTime has proven that collectors tend to make the most money in rare coins because they search out "undervalued coins" and buy during market lulls. Buying in today's market climate offers you superb upside profit potential. How to Invest Overseas - Intelligently! In recent months, many advisors have talked a lot about the wisdom of investing overseas, but most have failed to really address the way to do that. For new investors, investing in the U. IF - The Wonders of Investing If it seems as if all investors are selling, who is buying? If trading has become entertainment for you, it may be time to refocus on profits. If your stock has reached an annual low, can it go any lower? If your stock has reached an annual high, can it go any higher? If all the television analysts jumped off a bridge, would anyone care? If your portfolio is based solely on fundamental analysis, perhaps it is time to learn technical analysis. How Do I Start Investing Online and What Are Some Basic Tips? If you are new to investing online, don't put your entire life savings into an online account. Start with a smaller sum, which will be easier to handle and keep track of. Variable Annuities You know all the articles you read about annuities that have extremely high fees? And the ones that people lose a lot of money in? Well, these are better known as variable annuities. yes, they do have some advantages. In a Time of Need As I take my leisurely walk with my dog through the older section of the local cemetery, I pause to read the details on the barely legible, weathered headstones. I am fascinated with the dates, for I know each stone has a story to tell, a history of its own time and place, but only enough space for identity. Asset Allocation: Critical to Your Investment Success Asset allocation is a critical component of investing success. Both research and academic studies show asset allocation to be single most significant factor in determining your financial goals. Powerful Options Basics Lessons Improving your trading in 180 days. An option is a traded security that is a derivative product.By derivative product we mean that it is a product whose value is based upon or derived from the price of something else. 25 Ways to Find Companies to Buy When you start your program to purchase your "ideal" company, you quickly realize that your ultimate success will depend on two primary skill sets: 1) Your ability to FIND viable companies that are for sale, and 2) Your ability to effectively qualify the potential acquisition investment once found.This article is about only step one, how to creatively find viable companies and one's that are able to be purchased. Top Ten Investment Mistakes 1. Lacking an investment plan a/k/a/ "Don't take a trip without packing the map". How To Start Investing For Financial Independence, Part 1 Today, I am going to start a multi-part series about how to go from being a beginning investor to being "financially independent" in a steady and predictable way. At our website, we get tons of e-mails about how do I start, how do I start with little $'s, etc. Franchise Investing, Franchise Opportunities and Franchising Renewals Have you considered buying a franchise instead of trying to start a business from scratch. Many franchise agreements are renewed every five or ten years, automatically. Rolling your 401k: Contributory IRA vs. Rollover IRA In an ideal world you would start your working career with a great company in your early 20s, steadily climb the corporate ladder, retire at age 65, and draw a sufficient income from your accumulated 401k account to live happily ever after.Unfortunately, that's not how the real world works. Types of Investment The word 'investments' is one that most of us are familiar with hearing in financial context. For many of us, it may make us thing of big business and vasts sums of money, but there's much to the world of investments than multi-million dollar deals. Stock Market Horizons: Gold $3,000, Oil $70 In the last two decades, even though gold prices have dwindled from $850 to $350 an ounce, there are still market gurus who predict gold price to hit $3000 an ounce. Hecla seems to be quite bullish about the future. Seecrets on Investment: Tired of Making Huge Losses in the Stock Market - Part 1 Over 80% of all individual investors lose money in any given span of ten years. This figure is likely to be higher, given most people's reluctance to reveal their losses. Expand Your Pool of Investors for Your Company If you own a company that sells complicated products and you want more investors, consider having topics on your web site that discuss the background needed to understand your products and your company. For example, if your company specializes in producing and researching monoclonal antibodies, post articles discussing exactly what monoclonal antibodies are, how they are produced and what research your company is engaged in. Why You Need To Buy and Sell Gold Coins (Part 5) Grading coinsThe condition of a coin is commonly summarized by a grade. Because the value of collectible coins often varies dramatically with grade and overly generous grading is not uncommon, reasonable grading proficiency is an important skill for collectors. Press Release Scams and Successes: Reading Between the Lines Press releases are a means through which companies can keep the public up to date regarding their recent affairs. It is the duty of every public company to keep its investors and indirectly potential investors aware of what is going on in the company.
|
|
|
|
|
