It’s fashionable to bash the US, what with a gridlocked Congress and the fiscal cliff, but if you’re looking to expand your portfolio, you might seriously consider investing domestically instead of overseas. U.S. companies have multiple benefits that you may not find elsewhere. Surprisingly, Politico recently outlined some of America’s investment advantages:
First, the U.S. has favorable demographics — thanks to its relatively high birth rates and immigration. While the BRIC countries —Brazil, Russia, India and China— have generated extraordinary economic growth, the U.S.remains a magnet for many of the smartest, most ambitious people in the world.
Second, the ability to better tap into domestic sources of energy — natural resource-based and, to a lesser but promising extent, the growing array of clean technologies — will spur more job-creating investments, improving our balance of payments.
Third, U.S. policymakers were aggressive in responding to the financial crisis, and the financial sector has been quick to increase capital and reduce leverage.
Fourth, U.S. companies have restructured more quickly and more extensively than others since 2008 — boosting U.S. productivity growth.
The United States is a logical place to invest, but it is not without its problems. Politico also lists ways the United States could improve. Some advice is to “make progress on the long-run fiscal situation…make it easier for people to immigrate…and invest in infrastructure.”
There is no golden place for investment all the time, but it’s useful to understand the pros and cons when deciding where to put your money. Especially given the current strength in the dollar, you could do worse than domestic companies.
(For those of you interested in investing domestically, we offer two U.S. relative strength ETFs (PDP and DWAS) and a full suite of separate account options. Give Andy a call. He’s been a little lonely lately!)
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