Packing up the truck and move to.......Rio?
Pack the wagon- We are moving to Rio. Not Texas, Brazil… The US is losing its Global superiority. This comment isn’t earth shattering or overly perceptive. As a matter of fact most would agree that the economic power of the US has been on a gradual decline over the last 30 years. While it can be argued that in recent years it has fallen off the precious of economic power. There is no debate on the struggles of being second rate in this increasingly competitive market place. What do you do as a citizen of this country? Do you move to Beijing? Or Sao Paulo? Do you try to capture the explosive growth of these emerging economies by relocating your life? Well…. maybe. But the other option is to participate by investing. Global exposure has always been a part of any well defined portfolio. In the past and (those who might follow the modern portfolio theory) understand that international investing was an asset class that provided protection against domestic stocks. International investments had an inverse correlation with the moves of US markets. Over the last 20 years this inverse correlation has been reduced. And many argue that the investing in foreign assets can be achieved by buying global multinational blue chips. This philosophy has not prevailed over the last decade. If your portfolio lacked International exposure you were hurt. If your portfolio was void of emerging markets you found yourself quiet at the cocktail party. Without these basic exposures your portfolio has not seen a return in greater than a decade. The rational- Well it goes to the line at the top of this page. Global superiority . We no longer tend the door to enter the party. Looking back to 1975 less than 25% of all investments existed outside the US. Now in 2010, its better than 50%. By the year 2025, The international stage will be responsible for more than 76% of all investments that exist in the market place. Still think your portfolio doesn’t need international exposure? Well you could move. Learn to speak a foreign language develop an immunity to unsanitary water Or look to develop a multi tiered strategic portfolio that enhances returns all while lowering your risk. How you might ask? Stand by.