The huge demographic problem… plus debt and Congress’ inability to fix these problems means we need diversification out of the US dollar.
The Canadian dollar has been strong against the US dollar.
Canadian dollar versus US dollar chart at www.finance.yahoo.com
Click on photo to enlarge.
Canadian investments make sense… for now.
Canada has solid banks, vast agriculture, mining operations, and energy reserves making it perhaps the most stable country in the world.
Despite the recession in 2007, the Big Five Canadian banks have booked $18.9 billion total profits while the five biggest U.S. banks had $37 billion loss.
Canada is rich in water and natural resources, fertile farmlands, aluminum, copper, gold, iron ore, nickel, uranium and the “black gold” of Albertan oil sands.
There is plenty of land, resources, a immigration policy that ensures the sustainability of social programs and cushions against the damaging effect of an aging population, the future is pretty bright.
The Canadian equity market has performed really well long term.
The MSCI Canada Index ETF (Symbol EWC) is an easy way to cover the Canadian market.
EWC seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Canada Index. The fund invests at least 90% of its assets in the securities of its underlying index and in depositary receipts. The underlying index consists of stocks traded primarily on the Toronto Stock Exchange. Components primarily include energy, financial and material companies.
See more on the EWC ETF at the link below.
Yet Canada’s population pyramid does not look so good.
Over the years, like most of the industrialized world… demographics get worse!
There will be almost as many at retirement age as those at working age.
So a mix with another younger country (demographically speaking) adds more long term profit potential.
Vietnam is a good example.
The market is down as this chart shows.
The demographics look good.
One way to invest in this market is with the VNM ETF
American faces a bad huge demographic problem and debt. This could weaken the US dollar. An 80% in Canada and 20% Vietnam mix could provide diversification…safety now in Canada and long term profit potential in Vietnam.