As the US becomes more isolated, we as investors need to become more global.
For decades the US economy was so much larger than any others that everyone was pretty much forced to get along.
America’s dominance has been fading. The US economy is still estimated to be about a fourth of the world’s total, but the combined economies of China (16% of the global economy), Japan (6%) and Germany (4%) are larger now. Or the EU economy (22%) is almost as large as the US economy.
In the decades of dominance, the US has been less than competitive compared to the Chinese in developing relationships in Latin America. Recent activity by the US government has also weakened US, European trade. Now the European travel ban of U.S. residents creates another economic soft spot, not to mention the potential of stopping foreign students from living in the US.
Now there appears to be a risk that Iran and China will join in a sweeping economic and security partnership that would clear the way for billions of dollars of Chinese investments in energy and other sectors. The Chinese would invest in Iranian banking, telecommunications, ports, railways and receive Iranian oil over the next 25 years.
China and Iran would also increase military cooperation, that would create new and potentially dangerous flash points in the deteriorating relationship between China and the United States.
As America’s global dominance wanes, the greatest change of long term profits are available to investors when they invest around the world.
A recent Purposeful Investing Course lesson contained an eight page update fro Keppler Asset Management of the best value developed stock markets. Here are excerpts from one of the eight pages.
Recent Developments & Outlook
Supported by unprecedented fiscal and monetary stimulus, developed market equities advanced for the third consecutive month in June.
The euro advanced 1.0% to 1.1232 vs. the US dollar in June. Year-to-date, it is up 0.1%.
In June, twenty markets were up and three markets declined.
Hong Kong (+11.0%), New Zealand (+8.1%) and Italy (+6.8%) gained most, while Norway (-2.2%), Israel (-0.9%) and Portugal (-0.4%) had the lowest returns.
Year-to-date, only two markets (Denmark and New Zealand) advanced, while twenty-one markets declined.
New Zealand (+12.2%), Denmark (+9.0%) and the Netherlands (-1.1%) performed best year-to-date, while Austria (-31.1 %), Belgium (-23.9%) and Spain (-22.6%) had the lowest returns.
There is one change in our country ratings this month: Austria is downgraded to “Neutral” From “Buy” due to poor developments of her underlying fundamentals.The Top Value Model Portfolio now holds the eight“Buy”- rated markets Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom at equal weights.
According to our analyses, an equally weighted combination of these markets offers the highest expectation of long-term risk-adjusted performance.
A table in that report shows that the Developed Markets Top Value Model Portfolio is currently selling at 1.21 price-to-book and pays an average annual income of 3.57% compared to the MSCI USA Index selling 3.69 price to book and paying only an average 1.80% annual dividend.
The Top Value Model Portfolio is undervalued by 42% compared to the MSCI World (Standard) Index, by 54% compared to the MSCI USA Index and by a whopping 70% compared to the MSCI World Growth Index.
We can see the benefits of global investing from these excerpts. Despite Wall Street having its best quarter appreciation in years, it was still not the best performing stock market for the month or for the year to date.
New Zealand (+12.2%), Denmark (+9.0%) and the Netherlands (-1.1%) have performed best year-to-date in 2020.
Humanity’s greatest strength is the ability to cooperate. Technology forces us to live and cooperate in a global economy. So as the US withdraws from this greater opportunity, we as investors need to increasingly maintain and expand our global view.
Invest in Value, Safety, Profit & Get Paid DoubleThe next four years will be a period of high overseas stock growth.
The chart below shows the last 26 years of real-time forecasting by the global equity analyst we track to make our portfolio decisions.
The analyst is Keppler Asset Management and the index they create The KAM Equally Weighted World Index is 15.4% below the value that the analyst forecast four years ago in September 2016.
The chart shows how in the past, two and a half decades there have been four opportunities (red Xs) when the entry levels in global markets were below or around the lower valuation band. In the previous three low points like this, there has always been the highest growth and positive returns three to five years later.
So it’s good to know that if you invest in global stock markets overall, now, you’ll make capital gains over the next four or five years.
More importantly you get paid more income now!
Current markets have turned economic history upside down. Normally bonds pay the highest interest rates and add safety to a portfolio. Not in 2020.
This year equities have been paying a higher yield than bonds.
As of November 2020, according to Ycharts.com, (1) AA bond yields are at 1.59%.
The US MSCI Index pays a modest 1.68% as of November 2020 . That’s a terrible yield, but better than the 1.59% you can get in AA rated corporate bonds.
Just because US stocks pay more than dollar denominated bonds, does not mean they offer the best income deal. In fact US shares pay one of the lousiest average yields of the 46 stock markets we, via Keppler, monitor around the world.
Eight solid, top value stock markets (shown below) not only add diversification and the best long term profit potential, they pay more than double the average US yield. They pay 3.57% compared to the US yield of 1.68%.
This is why my core stock portfolio consists of a handful of top value share ETFs and this position has hardly changed in five years.
Let me explain why this strategy adds safety, increases long term appreciation potential and pays almost double short term income right now.
During the past five years, I have been steadily accumulating the same good value ETFs. I have traded only five times, so my trading costs, my fuss, fiddle and time spent have been kept to an absolute minimum.
I have been investing in iShare country ETFs. Each one invests in the MSCI Index of one of the top value markets above.
My strategy protects against stock market volatility and yet has potential for the best gains long term from rising share prices by holding an equally weighted portfolio of the best value based country ETFs.
The Purposeful Investing Course uses Keppler analytics to track 46 stock markets around the world into determine which markets offer the best value.
Since no one knows what the future will bring, investing in value makes the most long term sense.
Plus Value ETFs are Safer
The people who dominate stock markets include a pack of thieves. This fact has always been true. We were recently reminded of this fact when Wirecard AG, one of Europe’s most prestigious companies, listed on Germany’s premier stock-market index, the Dax 30 fooled everyone including its top grade, longtime auditor, Ernst & Young GMBH.
The shares in German fintech company Wirecard AG (symbol WDI fell 63.74% as it filed for insolvency proceedings, after revealing that more than $2 billion in cash missing from its balance sheet was all a fraud. The company’s market value fell to less than €500 million from almost €13 billion in a week.
Investors have seen this type of rip off again and again, really big scams from Enron to Bernie Madoff and these are just the tip of the iceberg.
Shares in stock markets are manipulated all the time. Stock markets (in fact almost all types of markets) are led by sharks plain and simple. Count on this fact. This is the nature of the beast and the number one goal of many big businesses is to take as much of your money as they can to line their pockets.
In the Wirecard AG example many thousands of investors have seen their hard work, their thrift, their security and hopes for the future disappear, even though they seemingly did everything right by investing in a blue chip, new era, high tech company.
A study of 92 years of investment returns shows that, despite the fraud and cheating and deceit, stock markets are still a good way to make your money grow… if you invest long term and diversify.
Our Purposeful Investing Course (Pi) strategy makes it harder for cheaters to grab your wealth because it’s very hard to manipulate an entire stock market, much less a dozen or so stock markets around the world.
Manipulators have a hard time tricking an entire market, especially larger markets. If you get the best value country ETFs, your chances of long term profits improve.
Pi teaches an an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required. You are investing in a diversified portfolio of good value indices.
Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares. Investing in an index is like investing in all the major shares of the market. You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.
To achieve this goal of diversification the Pi portfolio consists of iShare Country Index ETFs managed by Black Rock, Inc.
Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country. ETFs do not try to beat the index they represent. The management is passive and tries to emulate the performance of the index.
A country ETF provides diversification into a basket of equities in the country covered. The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.
My developed market portfolio has been diversified into eight developed markets: Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.
iShares Country ETFs make it easy to invest in each of the good value markets.
The ETFs provide higher income and incredible diversification for safety, plus the highest long term profit potential.
iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.
There is an iShares country ETF for most stock markets around the world.
Here’s how you can create your own good value strategy.
I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use. You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.
You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years. Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.
You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets). This analysis looks at the price to book, price to earnings, average yield and much more of all 46 markets.
This year I will celebrate my 52nd anniversary of global investing and writing about global investing. Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades. This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in the Pi course.
Time is your friend when you use a good value strategy. The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.
A 45 year portfolio study shows that holding a diversified good value portfolio (based on a good value strategy) for 13 month’s time, increases the probability of higher performance to 70%. However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.
Subscribe to the first year of The Personal investing Course (Pi). The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $124.50 off the subscription.
Enroll in Pi. Get the basic training, the 46 market value report and access to all the updates of the past two years, plus all new updates over the next year.
I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.
If you are not totally happy, simply let me know in the first two months for a full no fuss full refund.
You have nothing to lose except the fear. You gain the ultimate form of financial security as you reduce risk and increase profit potential.
Due to the COVID-19 pandemic we have cut the subscription to $174.50. You save $124.50!
Then because this global recovery from the pandemic is going to take years, we’ll maintain your subscription at just $99 a year rather than $299. Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.
Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.