Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Investors Beating U.S. Stock Market Can Be Simple

Stock-Markets / Stock Market 2017 Jul 29, 2017 - 03:39 PM GMT

By: Adam_ODell

Stock-Markets

Americans like to buy American stocks.

Europeans prefer European stocks.

And Chinese investors… well, you guessed it, they go heavily into Chinese stocks.

This is the essence of a phenomenon called home country bias.


As investors, we feel most comfortable buying the stocks of “our own” domestic companies. And we routinely under-allocate to foreign stocks.

That means U.S. investors are likely invested in…

Apple… not Samsung

Google… not Tencent

Amazon… not Alibaba

Intel… not the Taiwan Semiconductor Manufacturing Company

Verizon… not America Movil

Coca-Cola… not Fomento Economico Mexicano

I’ll note that we recommended an investment in Fomento to our Boom & Bust subscribers. Generally, though, we know well U.S. investors’ preference for U.S. stocks.

Let’s be honest… it feels uncomfortable investing in a foreign company… and it’s worse when you can’t even pronounce its name! Right?!

But sticking too close to your home turf – in the name of comfort, or otherwise – could be costing you a lot of money.

Each of the foreign companies listed above are beating the pants off their U.S. counterparts so far this year.

Samsung is beating Apple (49% to 29%)

Tencent is beating Google (57% to 23%)

Alibaba is beating Amazon (75% to 36%)

Taiwan Semiconductors is beating Intel (24% to -6%)

America Movil is beating Verizon (36% to -21%)

Fomento Economico Mexican is beating Coca-Cola (35% to 7%)

So, what’s an American investor to do?

Two simple things…

The first step is to acknowledge there’s nothing “special” about U.S. stocks.

They aren’t pre-ordained to be the investment world’s best market all the time. Sometimes U.S. stocks outperform foreign stocks. Other times, it’s the other way around.

U.S. stocks will always feel more comfortable to U.S.-based investors. Reinforcing that preference, currently, is the fact that U.S. stocks have indeed outperformed foreign stocks for a long while now. From the March 2009 bottom through the end of 2016, the S&P 500 gained a massive 225% while emerging-market stocks were up just 82% and foreign developed markets just 46%.

But as I first warned in March, there’s no guarantee U.S. stocks will always outperform foreign stocks. The reality is that U.S. stocks are more likely to underperform aheadas they’ve done so far this year.

Once you acknowledge that there’s nothing special about U.S. stocks, you’re halfway toward finding lucrative opportunities all around the world.

The second step is simply figuring out the best way to invest in foreign stock markets. And, as I see it, that decision is a no-brainer…

You should invest in ETFs.

Look, finding the “next Apple” in China is no easy feat.

Frankly, most investors don’t have what it takes to be stock-pickers in their home markets, let alone foreign markets. So most ordinary folks are better served investing in a diversified basket of foreign stocks and calling it a day.

ETFs make that easy and cheap to do.

Take for instance the iShares MSCI Mexico ETF (NYSE: EWW).

Around 22% of this ETF’s assets are invested in America Movil, Verizon’s counterpart, and Fomento Economico Mexican, the “Mexican Coca-Cola” that we recommended to Boom & Bust subscribers – both up around 35% this year. But it’s also invested in roughly 60 other Mexican stocks, ranging from banks and cement companies, to airlines and real estate investment trusts.

This ETF gives you a simple way to “buy Mexico” – with one click of the mouse, and for a measly 48 basis points. So far this year, that’s been a good buy.

Mexico (EWW) is the top-performing stock market ETF among the 15 countries I track in Cycle 9 Alert and 10X Profits.

Shares of the ETF are up more than 31% year-to-date. That’s three-times better than the S&P 500 (SPY)!

Chinese stocks are also having a great year. And because it’s daunting to buy individual stocks out of China, the iShares China Large-Cap ETF (NYSE: FXI) offers a diversified, low-cost, and simple way to gain access to China’s market.

Shares of the iShares China ETF are up 20% this year, nearly four-times the return we’ve seen from U.S. small-cap stocks so far.

The bottom line is, you’re missing a world of lucrative opportunities if you’re restricting your portfolio to U.S. investments only.

According to private equity firm KKR, China’s economy will account for a full 35% of global GDP growth in 2017. Emerging-markets outside of China will contribute an additional 41% of global growth.

Meanwhile, U.S. economic growth will be just 10% of the global pie this year.

That should make you think twice about loading up on U.S. names… and make you take a second look at global stock market ETFs, from China to Mexico and beyond.

Adam O’Dell
Editor, Project V
Follow me on Twitter ;@InvestWithAdam

Adam O’Dell

http://economyandmarkets.com

Copyright © 2017 Adam O’Dell - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in