The U.S might have the most millionaire households in the world. But Singapore, Switzerland and Qatar have the highest percentage of the wealth, according to the latest survey from The Boston Consulting Group.
Looking at this in terms of investment dollars, at the end of 2011, the U.S. represented just slightly over a third of the world’s equity investments. That’s down from half in 1985.
Granted a lot’s happened since then — including an Internet bubble, a real estate bubble and the financial derivatives bubble — that might explain how the value might be reduced. But this doesn’t change the fact that wealth is growing faster outside of the United States.
Here at home, a great way to keep your wealth growing is to invest in the trends that are catapulting these overseas consumers and the countries they live in to new, sustainable riches.
Right now I’m seeing two clear worldwide mega-trends that are turning ordinary investors into millionaires. To potentially add a few extra zeroes in your own trading account, you should be paying close attention to them, too.
Although emerging and frontier economies like China, Mongolia and even Turkey are still growing at twice the global norm, keep in mind that simply putting money into international stocks without a strong investment plan is no guarantee of a big payout.
A big part of your international-investing plan is not only knowing the best countries to pick, at the best times, but also which sectors to invest in. Their consumers can be a pretty powerful barometer of where the money is flowing.
If you want to follow the money — and if you want to make big money in the markets, that’s absolutely what you want to do — you should take a big cue from these international up-and-comers.
And right now, that means investing in two powerful trends in play that won’t go away even if the markets can’t maintain their recent, steady upward climb …
Top Trend No. 1 —
The New Global Middle Class Is Growing & Consuming By Leaps And Bounds
We are in the middle of a global demographic wave that will make the Baby Boom seem minor by comparison.
The Brookings Institute estimates that by 2020, the end of this decade, over half of the world’s middle-class consumption will come from developing economies. China and India are on-track to represent 40% of that rapidly expanding group.
And like the Baby Boom, middle-class populations in many of these emerging economies are experiencing substantial growth, thus fueling competition among high-quality companies.
So, not only will we have more countries and sectors to choose from, but also an expansive — and expanding — menu of stocks within them.
What are these consumers seeking?
Luxury goods to reflect their changing incomes and social status are a good place to start. In fact, today emerging markets already represent 30% of all luxury good sales globally, based on a Bain & Co. study.
If you look further out in time, Asia’s middle-class consumers are projected to account for 59% of the total global middle-class spending by 2030. That’s two and a half times what it was just a couple of years ago.
One of my favorite trends is the convergence of communications and transportation. Yes, the next big idea might just be in your own car.
Car sales in India and China are now expected to grow two to eight times faster than in the U.S. by the end of this decade. Pair that with the iPhone or enhanced car navigation and control systems, and driving will never be the same again.
This language/culture influence extends right into your own living room — with powerful media and telecommunications companies like Mexico’s Televisa (TV) being a huge hit with the growing U.S. Hispanic market.
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My Global Trend Trader members are sitting on a nice gain in this
Mexico-based television-broadcasting stock. |
Its competitor, America Movil (AMX), just recently entered the highly competitive European market, spotting new business opportunities there.
This is a THIRD WAVE effect — one where emerging-market companies make acquisitions and take positions in developed economies.
The FIRST WAVE is when U.S. and European money flows into an emerging country or currency/trading league. The SECOND WAVE is when that money is used within this system to create even more wealth. And the final wave is when this capital is exported, in effect starting the capital growth process all over again.
But all this development and progress can come to a halt if there are no roads to drive these cars on — or electrical grids and other networking solutions (i.e., cable, fiber optics) to power and connect people’s worlds.
This leads right into the other global trend you as an investor can’t afford to ignore …
Top Trend No. 2 —
The Trillion-Dollar Boom In Global Infrastructure
A few years ago, CIBC World Markets predicted that worldwide government spending on public works projects would total $35 trillion over the next 20 years. China alone is spending $300 billion a year, with 40% going to transport and a third going to power facilities.
Already a massive building boom is occurring in emerging markets as countries build roads, bridges and ports to connect their new mega-cities and to facilitate shipments to import-hungry places like China.
Half of the 30 most-expensive projects globally are in China, Brazil, the Middle East and other parts of the developing world. A dozen are in the rich countries, and three others are energy pipelines that will link Western Europe with Russia and Turkey.
Topping the list is China’s South-North Water Diversion plan, which would divert 44.8 billion cubic meters of water per year from the Yangtze River in southern China to the Yellow River Basin in arid northern China.
This is equivalent to nearly half the amount of water consumed in California annually!
Alone, its price tag dwarfs the $65 billion for all five U.S. projects in the top 30.
Here’s the amazing thing that happens when you open your borders to new investing ideas … you can find values in industries that did not exist years ago, like the companies that provide the infrastructure for all the data and online services we have become dependent on.
I’m not going to guarantee you a million-dollar gain. But these kinds of investing ideas can set you sailing for higher returns, while making (and keeping) more of that wealth right here within our borders!
Happy Trading!
Rudy
P.S. A global investment that never goes out of style is gold. Yet, a major precious-metals news outlet BANNED Uncommon Wisdom’s latest video from its site because it was too controversial. Here’s what their viewers missed … that YOU can use to your advantage!