Thursday, November 18, 2010

Fw: Go for Profits with International ETFs

 
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Thursday, November 18, 2010








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[«] Money and Markets 2010 Archive View This Issue On Our Website [»]
Go for Profits with International ETFs
by Ron Rowland

Dear Subscriber,

Ron Rowland

Let me ask you a question. Suppose you have the ability to invest in any stock market in the world. One of the largest markets has lagged badly for many years now. And there are few reasons to think the situation will improve.

Would it make sense to put the bulk of your assets in that relatively weak market?

"No, of course not," you will probably say. Good for you!

Unfortunately, most U.S. investors are making the wrong choice ... and many so-called "experts" are cheering them on. How can this be?

Simple: The weak lagging market I mentioned above is the U.S.! And sadly, thousands of professional financial advisors tell their clients to stick with the "safety" of U.S. stocks.

U.S. stocks aren't always
U.S. stocks aren't always "safe."

I wish I knew why so many of my peers refuse to face reality. Maybe it's just a force of habit.

However, those investors do have the ability to invest around the world — with hundreds of international exchange traded funds (ETFs).

So today I'm going to give you three challenging questions you should ask any investment advisor, stock broker or newsletter editor who tells you to keep most of your money in U.S. stocks, mutual funds or ETFs.

Challenging Question #1:
Is it hard for me to invest in
non-U.S. stock markets?

There was, in fact, a time when practical considerations made it very difficult for American investors to get overseas exposure. Many brokers couldn't process foreign trades, the tax paperwork was complicated, and it was hard to get news from off-the-beaten-path places.

These barriers are no longer relevant — and anyone who tells you otherwise is sadly uninformed. Let's look at them in order ...

  • With a few mouse clicks or a quick phone call, you can buy or sell an ETF like iShares MSCI Singapore (EWS) just as easily as an S&P 500 index fund. Both trade on the same exchanges. No need to get up in the middle of the night and call a broker on the other side of the world.

  • Tax paperwork? You'll have to speak with your Congressman if you want to get rid of it completely. A good interim step is the simple tax reporting that you can get even from discount brokers today. You don't have to frustrate yourself trying to calculate your cost basis ... unless you just enjoy that sort of thing.

  • International news is easy to find on the web now. Sometimes the sources are questionable. But there is no shortage of basic news and analysis, even on the most obscure exchanges. You can read the local newspapers online at the same time as Wall Street's analysts.
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Challenging Question #2:
Which ETFs have the best short-term
and long-term performance?

The table below shows you the top ten best-performing unleveraged equity ETFs for the one-year and five-year periods ended 11/12/2010. All are readily accessible to U.S. investors.

International ETFs dominate the winner's list!
International ETFs dominate the winner's list!

You'll notice that most of the top-ranked ETFs for one year, and ALL of the top-ranked for the last five years, specialize in international markets, particularly emerging markets. Yet relatively few investors have money in them!

This brings us to our third and most important question:

Challenging Question #3:
Why should I invest my money anywhere else?

To me, the answer to this question is quite obvious. Global economic power is shifting away from North America and Western Europe. The new leaders are in Asia and Latin America.

I've written about that mega-trend many times. Of course, I'm not saying there are never any opportunities to profit in the U.S. Obviously there are. My point is the potential is even greater elsewhere.

And to me, the logical answer is to follow the momentum wherever it leads.

Momentum is now with the emerging markets.
Momentum is now with the emerging markets.

Are international and emerging markets ETFs volatile? Yes, of course. They're subject to political unrest ... currency turmoil ... natural disasters ... and assorted other risks.

These are pretty much the same risks you take in U.S. stocks!

Like it or not, risk is everywhere. You can't escape it — but you can use it wisely. I think international ETFs are one of the wisest risks an investor can take. That's why I use them extensively. You should do likewise if you want to survive and profit in the coming decades.

You can get specific buy and sell recommendations for many global ETFs in my International ETF Trader service. Martin Weiss and I made a free video presentation to tell you more. Click here to check it out.

Best wishes,

Ron

P.S. This week on Money and Markets TV, we look ahead to the holiday shopping season. I'll be among a panel of experts to explain why it's so important for the retail industry, the overall economy and how you can profit with ETFs.

So tune in tonight, November 18, at 7 P.M. Eastern time (4:00 P.M. Pacific). Simply go to www.weissmoneynetwork.com and follow the on-screen instructions. Access is free and no registration is required.


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