August-18-11

Time To Invest Internationally?

Considering the United States economic situation and continued forecasts by experts from the President to economic gurus, that it may be a "slow and long recovery" is it time to review international investments? We at http://www.benboothe.com have discovered that while the U.S. dollar has declined, our investments here have lost value, becoming more attractive and profitable to those from nations which have strong currencies. So now, for example, while the US Dollar has declined over 25% in relationship to other nations, this gives a foreign investor an instant 25% discount in price, if they invest in the USA.

International New Development in UAE, Resort Investment for the Elite

As the U.S. Dollar has declined in value, international investments have performed remarkably well. Not only because of the decline in the US dollar, but because some international nations have productive economies, they are building, manufacturing, producing foods, and doing what the United States has gradually "sent over seas" in the past 30 years. So American investors might consider foreign investments that have strong returns on investment and are going up, while US. investments have declined, and look like they may decline even more as the U.S. dollar continues to lose value.

Consider the Las Vegas, Nevada example. The $25.2 billion state Public Employees Retirement System posted a 21 percent gain from investments during the last fiscal year.

Ken Lambert, investment officer for the system, says "the retirement system continues to buy stocks because they are a good investment."

More recently, the system's investments haven't been permanently hurt by the downgrade in the nation's credit rating. Any decline in investments were reversed as markets rebounded.

Why? Because the fund invests almost 1/5 of all of it's money in international investments.

The 21 percent return comes on top of an 11 percent gain in the previous fiscal year. The fund has realized $9.5 billion in two years.

The last time the fund achieved a higher return was in the early 1980s, when interest rates were high, according to Lambert.

The system has 103,000 active government members and 44,000 retirees.

About 20 percent of the fund is in international investments. As the U.S. Dollar has fallen year after year, foreign investments have risen in value. Conversely as the dollar has strengthened (which has been rare), foreign investments have become less attractive. But studies of dollar performance indicate a continued fall, every year, since the Clinton Administration. Why? Because, for example, when the Bush Administration cut taxes on the wealthiest segment of the economy, while multiplying government spending by almost 500%, world markets recognized the economic fallacy, and the dollar declined in value. When in 2011, the U.S. Senate and House of Representatives voted to extend a debt ceiling, and cut federal expenditures, without raising taxes or eliminating huge tax benefits to the most wealthy investors and companies such as big oil, (which are making billions, and sometimes which are paying no taxes) economic logic dictated that the dollar will fall in value. Why? Because these kind of unbalanced "political" decisions have no basis in sound economic judgement. All indications are that the dollar will continue to fall, especially in light of recent declines in credit ratings for American Bonds. When will the dollar rebound? When we again become a productive economy, when we manufacture and produce more products than we have to import. When we take the lead in technology and renewable energies and when we strengthen "heartland America and small business" making job creation possible. Certainly, when the United States shows a positive "balance of payments", the dollar and our bonds will be strong again. But that is not going to happen anytime soon.

Back in Las Vegas, Nevada, Lambert briefed the Retirement Benefits Investment Board Wednesday and told members that "the weak dollar makes international investments more valuable."

He said the international investments produced a 14 percent return. Conversely, returns on domestic investments have been significantly less. The only investments in the United States that can come near to this kind of return, are investments in renewable energy. Wind turbines, wind turbine powered commercial buildings and facilities powered by renewable energy show higher returns than almost all real estate in the USA. Agriculture, which is using renewable energy to pay for irrigation and energy expenses is beginning to show high returns. But other than a few sectors such as this, international investments in nations such as India and stable nations of Latin America are outstripping U.S. investment returns. So we ask the question again. What kind of investments might be attractive if you wish to go international?

  • Currencies of nations that have a strong production and manufacturing base. Latin America, India, and targeted nations of Asia.
  • Companies that can produce good cheaper and sell these goods to the economies of the west. Asia, Latin America.
  • International stocks that deal in commodities, food, mining, and "hard assets" in areas that have proven reserves or production ability. South America, Latin America, India, and targeted markets in Asia.
    Some resort properties show excellent potential investment returns
  • Companies involved in wind, solar and renewable energy products. India,China and Japan are leaders in these fields.
  • Companies that are involved in "water resources", including UAE, Israel, Australia are leaders in municipal, agricultural and desalination systems.
  • International hotels, spas, health centers, and "niche" markets in exotic places, such as Ecuador, Costa Rica, and select places around the world.

We have experience in international investments. Give us a call:

http://www.benboothe.com

or

http://www.bbarealty.com

800-379-8048

 

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