I've told you before about the enormous number of
high-yielding stocks abroad. If you remember, my research
team and I found only 17 profitable U.S. companies were
paying yields of more than 12%... compared to 227
Although the numbers fluctuate daily, that means roughly 92%
of the world's highest yields are found outside of U.S.
markets. To me the amount of high-yield international
dividend-payers out there is one of the market's biggest
But there's another big potential benefit to investing in
international companies that most investors fail to
This simple move could make investors extra gains of 10% or
more -- even in a single year. It doesn't require any extra
effort... in fact, it happens automatically when you invest
in international companies.
Here's how it works...
Say six years ago you took the trip of a lifetime to
Australia. Back then, $1 U.S. bought you roughly $1.30
Australian. That means a hotel room priced at $100
Australian dollars only cost about $77 U.S. dollars, thanks
to a favorable exchange rate.
today, even though the U.S. dollar has seen some gains of
late, in relative terms it has plummeted against most
currencies -- including the Australian dollar. It now trades
at a 5% discount to the Aussie dollar. So that $100 room in
Aussie dollars will now cost you $105 U.S. dollars -- a
36% increase, even though the hotel's rate didn't
What does this have to do with increasing dividends? Well,
what's bad news for your vacation is great news for your
international income investments.
Say you bought an Australian company five years ago that
paid a dividend of 10 Australian dollars each year. Back
then, you would have earned $7.70 in U.S. dollars after
But today, that same 10 Aussie dollar dividend would be
worth $10.05 in the U.S... or 31% more.
The bottom line is if the U.S. dollar weakens versus other
major foreign currencies, then your dividends will increase
over time... even if the company you invest in keeps its
dividend payment the same.
The best news is that despite a recent rally, I see the
downtrend in the dollar continuing over the long-term. That
will help investors looking abroad.
And I'm not the only one who thinks this:
dollar is enjoying a safe-haven status, but long
run I'm not a fan of the U.S. dollar. Our
country has too many problems."
-Dr. Allen Sinai, Chief Global Economist
at Decision Economics, December 27, 2011
"Don't Like a Weak Dollar? Might As Well Get
Used to It"
-CNBC.com, April 21, 2011
"America is also pursuing a policy of
-Alan Greenspan, November 10, 2010
But it's not just dividends that benefit from a falling
dollar when you invest abroad. Every dollar you invest sees
the effects as well.
Recognizing this trend years ago -- and investing alongside
it -- has already given international income investors a
You can see for yourself how the falling dollar has helped
score some great returns in international markets...
Selected Market Returns Since 2006
Return in Home Currency
Return in U.S. Dollar Terms
* Data from
08/07/06 - 08/07/12. S&P 500 return includes
This table makes it easy to see how a falling dollar
actually helps... if you're invested abroad.
Notice that the New Zealand market actually declined
over the past five years when measured in New Zealand
dollars, but it's showing a gain for U.S. investors when you
factor in the falling U.S. dollar.
Now keep in mind, if the dollar were to rally, the opposite
would happen. Your returns and dividends would lessen by the
amount the dollar strengthens. And while the dollar has
rallied recently -- for a variety of reasons I won't bore
you with today -- I think the U.S. dollar will continue to
lose value in the coming years.
That gives income investors plenty of time to take advantage
of this unique opportunity.
And in my opinion, there's no easier way right now to boost
your profits. Especially since you can own many of the
world's highest yielders without even leaving the U.S.
For more on international dividend-payers, I invite you to
watch my latest presentation. I've included names
and ticker symbols of the 17 American companies that
yield more than 12% (some as high as 19.7%) and several
high-yield international plays.
Visit this link to watch now.
StreetAuthority Co-founder, Chief Investment Strategist --
Ten Stocks, High-Yield International
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