That's it! I'm investing in Australia...

Monday, Jan 14 2019 by
1

My view is that over the next 5-10 years we'll see a shifting of power from the west to the east. By that I mean economic powerhouses will soon be those that are producers/manufactures and not consumer countries - i.e., America.

Which country is well run and has a vast amount of natural resources to supply these emerging marketing countries? Australia.

Even if the US goes into a recession Australia does far more business already with countries closer afield, especially China. As the likes of China and other South East Asia countries increase their infrastructure they'll need resources to do so. When the boom in emerging market countries happens, some would argue it already is, Australia is in a prime position to benefit.

How do I plan on benefiting? Simple, owning companies within the supply chain - especially mining and transportation, that do not transact in US Dollars.

In the above scenario I would also expect the Aussie Dollar to perform well against other currencies. Especially those where the printing presses will be on 24/7...

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Disclaimer:  

All information is for Educational purposes only. It is not to be taken as buy or sell decisions or financial advice.

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3 Posts on this Thread show/hide all

jonesj 14th Jan 1 of 3
2

I would assess their property bubble and the likely impact on the large financial sector before going overweight on Australia.
Also there are plenty of other overseas markets which offer diversification away ftom the big western debt fuelled economies. Participating in a number of them is my preferred way.

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Jcorsellis 14th Jan 2 of 3
1

Jones, which overseas markets are your preference?

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jonesj 15th Jan 3 of 3

I have about 5% in Japan, 35% in other Asian markets, 12 % in Emerging markets & 14% in Europe Excl UK (of which about 4% is in Poland).  A lot is via investment trusts, although there are single country ETFs and a small number of direct stock holdings.  I had about 4% in Vietnam, but trimmed that back last year after a sharp rise.

The percentages  are lower than in the past as I moved some into gold, cash and short term US treasuries earlier in 2018.   Some of my cash is directly in SGD.

I prefer countries on lower valuations.  Starcapital.de is a good source, although I also look at the Msci index PE ratios.

If a country is on a low PE AND not heavily indebted, I tend to like it.   For example, Singapore.


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