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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Examining Top Foreign Investments for 2016

Stock-Markets / Investing 2016 Jan 06, 2016 - 10:59 AM GMT

By: Submissions

Stock-Markets

Larissa James writes: While there are plenty of sound investments to be made in the United States in 2016, wise investors are expanding their horizons beyond domestic soil. In fact, many investors are choosing to place a majority of their portfolios overseas. And while there’s no need to move all of your assets, there are some solid foreign plays that you should know about as we enter 2016.


“The global economy has changed the way we approach investments. Just a few decades ago, creating an investment portfolio was a relatively simple affair,” writes Fariba Ronnasi, CEO of Elite Wealth Management. “The idea of owning assets outside of the U.S. was considered risky and unnecessary.” Times have changed, though. Modern diversification requires investors to explore overseas markets and remove the domestic blinders that once guided financial decision making.

It’s becoming increasingly clear that international markets are one large dynamic organism, not a bunch of fragmented parts that happen to interact on an occasional basis. In fact, if you want to grow your portfolio and protect your assets moving forward, you pretty much have to pursue foreign opportunities.

3 Foreign Investment Classes to Watch

Throughout 2016, it will be wise to keep an eye on three specific investment classes. By spreading your assets across multiple markets, you can increase your chance of yielding high dividends while decreasing the risk related to tying your assets to a single factor.

  1. Foreign Stocks

“The U.S. stock market faces a host of headwinds — such as coming interest rate hikes from the Federal Reserve, a strong dollar and full valuations, to name a few — that could limit gains in 2016,” writes Adam Shell of USA TODAY. “Those domestic obstacles bolster the case for putting more cash to work in foreign stock markets, such as Europe and Japan where central bankers are more market-friendly and valuations are less pricey.”

It could be particularly profitable to keep an eye on international stock ETFs this year. The 10 referenced in this article look especially promising moving forward.

2. Foreign Currency

Generally speaking, foreign exchange markets are the place where short-term and momentum-based investors put their money. However, it looks like there may be some solid plays for savvy, long-term investors in 2016.

With many of the world’s central banks holding real interest rates negative and printing large volumes of money, the U.S. dollar, as well as currencies in developed nations such as Japan and select European countries, may not be as safe as they once were.

Forward-looking investors will pay attention to the New Zealand dollar, Singapore dollar, Hong Kong dollar, and Chinese renminbi in 2016. Each represents a relatively safe play for storing assets, though investors shouldn’t expect huge returns.

3. Foreign Real Estate

Finally, it’s always smart to keep an eye on international real estate markets, which can deliver high returns under the appropriate circumstances. In fact, one real estate investor calls this the “golden age for the purchase of real estate overseas.”

That same investor, Kathleen Peddicord, suggests looking at five specific markets in 2016. They are Medellin, Colombia, Algarve, Portugal, Ambergris Caye, Belize, Panama, and Argentina. 

“Right now, U.S. dollar-holders have a big advantage in much of the world, from euro-land to Colombia and beyond,” Peddicord writes. The only question is, will the average investor take on what’s perceived to be an uncomfortable risk?

Broaden Your Investment Horizons

There’s nothing wrong with domestic investments. In fact, as the economy strengthens and markets improve, it will be wise to invest heavily in American stocks, real estate, and financial markets. However, it’s also imperative – for the sake of diversification – that you consider foreign investments in 2016.

By Larissa James

© 2016 Copyright Larissa James - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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