International Diversification

  • 18 Aug
    The Bear Case To Investing In China

    The Bear Case To Investing In China

    • The first risk is a possible contraction in the Chinese credit cycle.
    • However, any kind of interest rate spike leads to immediate PBOC intervention.

    Introduction

    I have been pretty bullish in my previous articles about investing in China as I think it’s a positive risk reward situation. Nevertheless, a positive bull case wouldn’t be fair without looking at the risks China carries. So in today’s article we’ll discuss the main risks plaguing the Chinese economy and stock market. Understanding the specific risks will also help in better positioning your portfolio to the ugly things that might happen and carefully selecting the stocks that will be less affected. More →

  • 09 Aug
    Germany Is Solid As A Rock – Sven Has Some Investment Ideas For How To Take Advantage

    Germany Is Solid As A Rock – Sven Has Some Investment Ideas For How To Take Advantage

    • In terms of fundamentals, the German stock index is overvalued compared to the S&P 500.
    • However, there are a few stocks that could offer interesting diversification possibilities as revenues aren’t that dependent on Europe.
    • Some companies also give inflationary protection which is one of the greatest European risks for investors in the long term.

    Introduction

    I’ve described the investment environment in Europe as very risky due to the many black swans that could hit it, from political to financial issues. Nevertheless, this doesn’t mean that there aren’t any good investments in Europe, especially for those who want to take advantage of the liquidity provided by the ECB and from the possibility that the ECB follows the Bank of Japan, i.e. starts buying stocks when it becomes clear that buying corporate bonds isn’t enough to keep the economy growing and to spur inflation. More →

  • 02 Aug
    Want To Invest In The Indian Economic Boom? It Isn’t Easy, But Sven Shows You How It’s Possible

    Want To Invest In The Indian Economic Boom? It Isn’t Easy, But Sven Shows You How It’s Possible

    • Investing in India isn’t easy as many Indian investments won’t benefit from Indian growth.
    • Indian ETFs won’t benefit either while valuations are a bit high.
    • There is a third option.

    Introduction

    If you read yesterday’s article on economic growth projections per country, you know that India has an unmatched position in the world. It has a young and more eager population, a huge labor cost advantage, relatively good education, a low starting point, and issues that can be resolved like corruption and a large geography.

    The country is growing at around 7% per year and is expected to continue to continue growing at that rate for the next few decades. There will of course be ups and downs, but the long term trend is extremely strong. More →

  • 01 Aug
    Want The Secret Formula For Economic Success? Look To Ray Dalio

    Want The Secret Formula For Economic Success? Look To Ray Dalio

    • It’s possible to estimate a country’s economic growth with precision and I have done so in this article. Perhaps it’s better to say that I used the available—and free—research done by 1,500 Bridgewater employees.
    • As future economic trends are pretty clear, it’s important to position one’s portfolio accordingly.
    • However, don’t just jump into emerging markets at any price. Compare the fundamentals and the growth in relation to your investment horizon.

    Introduction

    There’s a lot of talk about economics, economic growth, what drives it, etc., but there aren’t many facts that properly show links between causes and effects.

    One person who researched those links and shared the findings is Ray Dalio, hedge fund manager of Bridgewater Associates. In today’s article, I’ll describe what Ray found and then analyze how we can best position our portfolios in order to be more exposed to positive forces and less to negative forces. More →

  • 21 Jul
    Why Investing In Australia Is A Good Idea Now

    Why Investing In Australia Is A Good Idea Now

    • Positive demographics, strong economic growth, a good business environment, and relative cheapness is what you should look for when investing abroad.
    • Australia has it, and on top of it, Australia offers a high dividend yield and a large potential currency tailwind.
    • The ETF is highly skewed toward financials but a decent stock picker can find a few great picks on the Australian stock market.

    Introduction

    Before investing in a country, I first like to check the demographics because it’s an easily predictable trend that has a huge impact in the long term.

    Because demographics are a long-term trend, it’s usually shunned by most analysts, but a population that grows at 3% per year adds at least 30% to a country’s GDP over 10 years in comparison to a country without population growth (think some European countries). More →

  • 19 Jul
    The Big News From China & What It Means For Your Portfolio

    The Big News From China & What It Means For Your Portfolio

    • The Chinese economy surprised to the upside and Chinese stocks have spiked.
    • A fundamental analysis shows that Chinese stocks are still 50% undervalued.
    • The Chinese economy is less risky and growing faster, but the market hasn’t yet fully recognized the situation which makes this the best time to invest.

    Introduction

    One of the greatest fears circulating the investing environment in the last few years has been that China is about to slow down and drag the whole world into negative territory. I found such a fear a bit silly because it wasn’t based on proper macroeconomic analysis but mostly on western investors’ perception. More →

  • 17 Jul
    How The Economic Machine Works & Why You Need To Prepare Your Portfolio For It

    How The Economic Machine Works & Why You Need To Prepare Your Portfolio For It

    • Productivity growth is the long-term key, make sure your portfolio follows it.
    • The global distribution of wealth is shifting very quickly.
    • Preparing your portfolio for what’s going to happen doesn’t even cost that much. On the contrary, it is even more profitable.

    Introduction

    Ray Dalio is famous for many things. One of them is his explanation of how the economic machine works where he describes how productivity growth, the long-term debt cycle, and the short-term debt cycle affect an economy.

    Today, I’ll briefly summarize his findings as they are reported in a 300-page document and, most importantly, see how Dalio’s economic philosophy can affect our investing strategies. More →

  • 14 Jul
    The Market Isn’t Excited About Brazil Yet. Here’s Why You Should Be.

    The Market Isn’t Excited About Brazil Yet. Here’s Why You Should Be.

    • The Brazilian economy is at a turning point. Inflation is down, exports are up, and growth is projected to be at 2%.
    • As currencies follow the economy, the stronger real will add a tailwind to your returns.
    • Don’t invest blindly in an ETF. Buying a few stocks will lower your risk and increase your returns.

    Introduction

    I have written about Brazil a few times here at Investiv Daily, and have primarily described the potential of the country. This article isn’t about potential because the situation has started to turn, so it’s time to really take advantage of the new trend. More →

  • 05 Jul
    Where The Growth Is: How To Invest In Emerging Markets

    Where The Growth Is: How To Invest In Emerging Markets

    • Emerging markets haven’t been the best investment in the last 10 years, but economic developments met expectations.
    • Long term analysis shows that emerging markets have just started to develop and the fundamentals are extremely cheap for the expected growth.
    • Each emerging market is different and one has to individually analyze political, currency, demographic, natural, and other risks in order to make proper investment decisions.

    Introduction

    There is a huge difference between short-term and long-term effects on financial markets.

    In the short term, anything can happen and sentiment is what mostly drives short term trends. If we take a look at the long-term chart for the iShares MSCI Emerging Markets ETF (NYSEARCA: EEM), we can see how it’s still 24% below its 2007 peak. More →

  • 19 May
    What Three Chinese Companies Tell Us About The Risks You Need To Watch For In Emerging Markets

    What Three Chinese Companies Tell Us About The Risks You Need To Watch For In Emerging Markets

    • Proper due diligence is needed to separate low risk from high risk investments.
    • The fact is, nobody does their research anymore as ETFs and index funds have taken over the investment world.
    • I’ll describe a few Chinese investments that look amazing at first but can easily lead to a total loss.

    Introduction

    Yesterday we talked about how emerging markets are generally becoming attractive. Today we’ll discuss a few Chinese stocks that show some of the risks lying in such a market.

    As I see the S&P 500 climb to new highs, I understand that risk isn’t what investors think about, but my experience that spans a few market cycles keeps me focused on the risks while investing.

    By risk I don’t mean short term volatility coming from market sentiment. The S&P 500 hasn’t been volatile at all in the last 8 years as it has just gone up, but for every point that it goes up while corporate earnings remain flat, the risk investors are taking gets higher. More →

1 2 3 4