Now’s the time to go foreign
Today's Financial News - Posted October 22, 2009
Thanks to an incredible national debt, growing political risk and a government that loves mailing checks, international markets are paying off. Now’s your chance to get in on the action.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): Anywhere but America. That is the philosophy of plenty of investors these days. As the dollar weakens, unemployment rises and political uncertainty surges, more and more folks are looking for growth and safety overseas.
Today’s report from Moody’s that says Washington had better cut its deficit or risk its triple-A rating is not helping the situation. Until recently, that perfect rating was considered untouchable.
A lot has changed.
But not all is bad for domestic investors. As long as a market is moving somewhere – and there is no doubt the currency markets are moving – there is money to be made.
That is good news for investors and the folks that make the investments happen. According to press releases this morning, Fidelity is opening the door to foreign equity and currency investments by expanding its international trading capabilities.
Now the company’s trading customers will have access to a dozen foreign markets, plus a shot at eight currencies, just like the boys on the Street.
As Fidelity notes, 80% of the world’s best-performing stocks over the past decade were traded outside of the Wall Street.
Leverage the fall
Looking at recent trends, that figure is likely to grow even larger over the next decade. Toss the variable of currency fluctuations into the equation and we have a recipe for strong profit potential.
Imagine banking 80% gains on an equity position and magnifying the action with a 10% change in the underlying currency. With that kind of potential, there is no reason not to be searching for exposure to international markets these days.
The recent surge at the Dow can be greatly attributed to a declining dollar. With strong exposure to international markets and foreign currencies, the nation’s largest companies will boost their bottom line as they convert stronger foreign currencies into weaker American dollars.
Of course, there is always risk in international trading. Finance students will always discuss political, interest rate and conflict risk. But, frankly, the domestic market has all of those risks and more.
As long as Bernanke and his troupe at the Fed keep short-term rates in ultra-low territory, the currency markets will be attractive.
If you haven’t gotten the clues yet, get international exposure. It has never been easier or more lucrative.
Next Article: TFN eNews 10/22/2009: Anywhere but America!
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