Supply and Demand

by | Oct 4, 2014 | Archives

This is the last weekend to enroll in or apply for a scholarship for the October Montreal International Investing & Ecuador seminar. See details here.

Our wealth and economic opportunity is pushed by supply and demand.  A growing global population , if put to work in increasingly efficient ways increases everyone’s wealth.  There is a lot of bad news everywhere, but beneath this opportunity grows.

s&P 500

S&P 500 share chart at www.fiance.yahoo.com (1) Click on image to enlarge.

The S&P 500 Index has risen 81.63% in the past five years.  The S&P Global Water Index has risen 53.07%.

s&P 500

S&P Global Water Index share chart at www.fiance.yahoo.com (2)

This is a distortion you can cash in on through indexing (3).

A recent New York Times article entitled “U.S. Household Wealth Hits Fresh Record” (4) by Neil Shah enforces this fact and says:  Americans’ combined wealth posted a new high in the second quarter, allowing consumers to ramp up borrowing—a development that could put the economy into a higher gear.

The net worth of U.S. households and nonprofit organizations—the value of homes, stocks and other assets minus debts and other liabilities—rose about $1.4 trillion between April and June to $81.5 trillion, the highest level on record, according to a report by the Federal Reserve released Thursday. 

Economists hope rising asset values, falling unemployment and stronger household finances lead to more consumer spending, which accounts for roughly two-thirds of economic output. Recent reports on the nation’s economic health have been mixed: Unemployment is falling faster than many expected, yet growth remains fitful thanks in part to weak income gains for most Americans.

Investing and doing business in this positive direction enhances your chances of increased income and wealth.

This article confirms the positive aspect of our socio-economic existence.  The globe continues to have more people who produce and consume more and consequently more wealth and more opportunity.

This process however has to adapt to availability of natural resources.  Humanity has seen numerous power sources improve its productivity during the industrial revolution of the past several hundred years.  We passed though the water era, the steam era,  the internal combustion engine era, the turbine era and the electronic era.  Two crucial fluids flowing through most of these eras have been water and fossil fuels.  Electronics and Hydraulic Fracturing (fracking) have helped stabilize the fossil fuel supply but have inhibited the water supply.

Part of successful investing is to see if this extra wealth, whether it is spent or saved, where will it flow.  One place it is sure to flow is into water.

Yet which water shares will rise and which will drown and when?  Answering such questions takes time and there are numerous obstacles in seeing the entire picture.  An easier way to invest in water shares is via indexing.

Anticipating short term price movements is like trying to predict wave tops on an incoming tide.  Index with ETFS lets you invest in distorted sectors in the least expensive way.

Here are four ETFs that allow you to invest in water indices.

PowerShares Water Resources Portfolio (NYSE: PHO) started in September 2005 and invests in the Palisades Water Index.

PowerShares Global Water Portfolio ETF (NYSE: PIO) started in 2007 and invests in the Palisades Global Water Index

The First Trust ISE Water Index Fund (NYSE: FIW) started in 2007 and invests in the  ISE Water Index

The Claymore S&P Global Water ETF (NYSE: CGW)  started in 2007 and tracks the S&P Global Water Index

We’ll review investing in water and the different water indexes at the the October 10-11-12 Montreal seminar.

Long term investing is like predicting tides.  We can know the long term direction.  The only things that can stop accurate prediction of tides are shifts in resources from events such as silting or dredging.

This is why investments in water make sense.  We know that populations are increasing.  Wealth is growing and more people want more water.  Yet like land, God is not making more so making better use of what we have grows in importance.  This is where the opportunity is.

Learn how to invest in water and how to invest by indexing from ENR Asset Management.com or contact Thomas Fischer at Thomas@enrasset.com

Our report “Borrow Low – Deposit High” shows how to buy shares like Aegion with low coast five year loans in euro, dollars and Japanese yen.

Order Borrow Low – Deposit High, Multi Currency Report here $79.

Learn more about “Borrow Low – Deposit High”.

Gary

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(1) S&P 500 share chart at www.finance.yahoo.com

(2) S&P Global Water Index at www.finance.yahoo.com

(3) Article on Indexing

(4) U.S. Household Wealth Hits Fresh Record