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The
U.S. is only one actor in the theater of global commerce.
Consider:
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America's gross domestic product is
$13.8
trillion. The world total is
$54.3 trillion, meaning that
we Yanks contribute fully 26% of the world's total. Or, to
put it another way: 74% of global commerce takes place
entirely absent of us.
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The U.S. dollar, in
which the majority of your wealth is denominated, has
plummeted in the past five years. It's lost -18% against the
pound, -22% against the ruble and -23% versus the euro.
The
greenback has tumbled -33% to the Chilean peso, for
crying out loud.
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Last year, an incredible 182 countries throughout the globe
delivered stronger economic growth than the U.S. Most people probably would
have a hard time even naming 50 countries off the top of
their head. Take Palau, for example. You'd need a computer to find it on
a map, but its dervish-like little economy is growing at +5.5%
vs. little-to-no growth here at home this year.
Over the next few years, the U.S. will do just fine. In many
sectors, corporate earnings remain
solid. And America is still the beacon and benchmark for the
rest of the world. When international trouble or disaster strikes, no
one calls Singapore -- they get on the horn to Uncle Sam.
Even so, the rest of the world -- at least economically -- is
growing ever larger in the rearview mirror. It's gaining
fast. Thanks to falling trade barriers and modern
technology, the global marketplace is spreading wealth to
countries formerly trapped in poverty -- including the world's
largest emerging markets, sleeping giants like China and India,
whose fast-growing economies are THE financial story of the
century.
These international players are hungry to take part in
the NBA-like competition of the global marketplace. They've
built infrastructure and invested in education. They've
reached critical mass -- and serious investors simply can't
ignore them any longer. A portfolio that buys only companies
here at home is missing out on the vast majority of the
world's growth . . . and most of its highest-yielding stocks.
Foreign growth rates are far outpacing the U.S.
U.S. GDP growth is miniscule.
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Add in
the mortgage mess, credit crisis, record oil prices, rising
food costs, the budget deficit and trade gap -- friends,
it's
double-drill with no canteen for U.S. investors. Fed
Chairman Ben Bernanke has said so himself, albeit in rather
more dignified language.
Though the U.S. economy is likely to take it on the
chin this year, that's not the case for the rest of
the world. My chart shows the International
Monetary Fund's growth projections for the U.S. and
a handful of potential investment havens.
Sure, other countries
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also will feel the negative factors that are hurting the
U.S., but foreign economies are still expanding at much
faster rates, and Wall Street is always willing to
pay handsomely for growth. So does every
other stock exchange, be it in Santiago, Johannesburg or
Melekeok, Palau. (OK, maybe not so much there, but you get
my drift.)
The U.S. is a dividend desert; move to an oasis
America represents a pretty bleak
opportunity for income investors,
with the average stock in the U.S. offering a dividend yield
of just 2.1% -- not even higher than inflation. In
fact, we now have the
lowest-yielding stock market in the world, apart from Japan's.
Stocks offer significantly higher
yields in almost every other country on earth. New
Zealand companies pay an average of 8.3%, Italian firms 5.3%
and companies in the Philippines are yielding 4.6% -- all
more than twice the yield offered by U.S. equities.
Why?
International yields are higher partly because of stiff U.S. tax
policies that historically discouraged big dividends.
Policy-makers have moved away from that, though the shift is recent and
like anything political, it might not be permanent.
Foreign nations are also chock full of highly profitable state-sanctioned monopolies
-- these dominant market leaders can afford to pay
above-average distributions. Dividends are also higher abroad because
companies in emerging markets are often forced to offer fatter
distributions to attract
foreign investors.
Whatever the reason, you can expect vastly higher
yields abroad, giving you yet another reason to expand your
investment search beyond U.S. borders.
Foreign markets are shellacking Wall Street
The U.S. market's broadest measure, the S&P 500 Index, rose +3.5% in 2007, a lousy showing well
below its average. And that's not the only poor performance
in recent memory; the S&P also posted dramatic losses in
2001 and 2002.
The big
picture is simply this: The U.S. stock market is one of the
world's laggards.
That might seem like a bold
generalization, so we ran the results from every equity
index in the world for the past ten years. The top
broad-market performer was Peru, which notched an annualized
10-year gain of +25.6% (its total return over that time was
+859%). By contrast, the Dow Jones Industrial Average and the Nasdaq
have posted tiny annualized gains of just +3.4% and +3.5%,
respectively.
In the meantime, major market indexes in other countries
have managed to absolutely knock the cover off the ball.
China rose +180% last year. The Ukraine was up +135%.
Slovenia posted a +97% gain. India seemed like a
laggard -- its markets gained a mere +65%.
It's a jungle out there
And a savannah. A desert.
A mountain range . . . and
even Palau is as nice an island as you'd ever want to visit.
We
live on a big world with a lot of opportunities, and you
can find the best of them in my
High-Yield International
newsletter. It's the only product of its kind devoted exclusively to finding
high-yielding securities in today's best-performing foreign
markets.
In recent issues, I've profiled some of the most
attractive dividend-payers on the planet, including an
Australian utility with a 20.8% yield, an international
shipping company paying 14.5%, an emerging Europe fund with
a 21.6% yield, and a diversified real-estate fund with
dividends of 23.0%, among many others.
Let me give you another example. I
made a wisecrack earlier about Singapore, but the investment
potential of this tiny nation is no laughing matter.
It's perfectly positioned at the intersection of various
shipping routes, and it has the largest and most efficient
port in the world. Real estate is booming, and the economy
is forecast to grow at a +5.0% clip for the next few
years. I found a REIT there that's yielding 9.0%.
If you'd like to learn the names of these stocks --
plus receive a steady stream of foreign stocks, funds, and
other investing ideas with abnormally high dividend yields
each and every month -- then I'd like to extend you a
personal invitation to try my premium investing newsletter .
. . High Yield International.
Visit
this link to learn more.
Thanks for joining me on my search for today's
highest-yielding securities!
--
Nick Lanyi
Co-Editor
Global Dividend Opportunities
GlobalDividends.com
839-K Quince Orchard Blvd.
Gaithersburg, MD 20878-1614
P.S.
-- Don't miss a single issue! Add our address, Editors@GlobalDividends.com,
to your Address Book or Safe List. For instructions, go
here.
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