Millions of investors have started to look to the East for their investments. Overlooking the huge opportunities in America just as She’s about to turn the corner back into growth, and profit is something many will regret. Here are seven reasons to look to the greatest markets in the world for your next investment.
1. The Biggest And Best Companies In The World List In The USA
Think multi-billion dollar firms and you’re almost certainly thinking about a who’s who of the American stock market. Everyone from technology giants like Apple and Microsoft to the captains of industry such as Exxon Mobil and Diamond Offshore are listed in the USA. These companies not only deliver huge profits year on year but deliver consistent dividends – something the speculative stocks in the Far East have yet to come close to matching.
Stock ownership is almost a tradition in America like property ownership or in some States owning a gun. As a consequence the markets in the USA cater to almost every individual – no matter how big or small an investment is required. New investors looking to load up $1000 will find most firms accessible to them with a minimum share purchase of just one unit and easy access to share dealing accounts. Arab oil billionaires looking to buy huge stakes of entire industrial juggernauts will find a home in the New York Stock Exchange alongside those same investors. Many overseas markets simply don’t provide small enough transactions for smaller investors or have the ability to cater to those who are investing true fortunes.
3. Transparency And Availability Of Information
The more developed stock markets of the US have significant information and trust advantages over those in smaller less developed markets. Literally thousands of high quality pages of content is often available on one highly traded stock. In some markets information about firms is so shrouded in secrecy that only a payment to an analyst or subscription to a niche news source is sufficient to gain even the slightest insight.
Not only is information available for free but the strict rules of the Securities and Exchanges Commission forces firms to declare early if they expect any unexpected variation in their results. These profits warnings and other announcements provide vital insight to investors. Overseas investors might find out way too late that the profits at their firm of choice have plunged into losses.
4. Track Record Of Success
Many of the top American firms have a track record of fifteen or more years of delivering excellent growth, dividends and profits. This kind of information is crucial to a prudent stock selection process and is difficult to match when comparing to Asian stocks with much shorter track records.
5. Fraud And Corruption In Small Markets Is Rife
In some popular overseas investment jurisdictions corruption is so rife it’s almost as much a part of the culture as stock ownership and automobiles are part of American life. India, for example, is often seen as a vibrant and technologically advanced opportunity to invest but corruption is so widespread Wikipedia even has an entire section devoted to discussing it. Not that as serious investors we’d ever look for information on that site – but the fact that the issue is so mainstream as to encourage such a high degree of public discussion is a worrying sign for those looking for a safe, stable place to invest for their future.
6. Low Levels Of Government Stock Manipulation Of Excessive Regulation
It would be unheard of in the land of the free to restrict the free trade in stocks. This is not the case in many jurisdictions. In Japan for example trading limits are in place which prevent stocks from moving outside a specified range on a given day. In other countries, foreign investors face restrictions on sale during downturns, difficulties removing capital from the country and other risks of political interference in the market during periods of instability.
“To manage volatility, the Tokyo Stock Exchange and the Osaka Securities Exchange set “daily price limits” for all securities. These limits create a price range outside of which a security may not trade on any given day. Limit prices must also fall within this range.”
Source: Fidelity Investments
7. Currency Risk: US Dollar Is The World’s Only Reserve Currency
For the foreseeable future the United States Dollar will be the reserve currency of choice for central banks around the World. They hold more US currency than they would ever dream of holding in Gold, Euros or any other suggested alternative. Investors can remain positive about the value of Dollar denominated investments holding their value in the face of uncertain currency markets. If an investor looks to the East and the currency of the country they chooses is decimated by speculation, unemployment or inflation at home then the value of their stocks might grow by 400% nominally but adjusted for the loss in value of that base currency might not have grown at all.
Also, don’t forget that in 2011, the US market was amongst the better performing markets worldwide and so in comparison to other markets, it’d be a good bet for 2012. In times of crisis and instability, fund managers worldwide will be looking to invest in US stocks over all others.
Using our proprietary strategy we have been able to generate consistent profits in our stock investment.
BL, CEO of Tactical Trading Academy – For Your Profits, Your Success Is Our Success!