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Seeking The Highest Yields Outside The U.S.

19 December 2008 3 Comments

As financial expert Peter Schiff’s (not to mention Jim Rogers who I’ve followed for years) influence grows on me and my bearishness on the United States intensifies, much of my investing focus is shifting to safety abroad. I am extremely bearish on the U.S. dollar as I’ve been detailing for a while now.

My goal then is to build positions in high yielding non-dollar based assets.  Stocks worldwide are down big due to the global economic slowdown.  I would say that stocks are cheap everywhere because cheap would mean that they will definitely rebound; to rebound, we would need future earnings.  I’m not sure where future earnings will come from in the United States.  In resource rich countries that are focused on exporting and are not in debt up to their eyeballs, then a rebound is likely… eventually.

I wish to seek out these investments and collect high dividend payouts until the rebound.  Even better is the fact that you can collect the dividends in a foreign currency so you not only recieve the return from the stock itself but also the potential for a return when you convert back into dollars (I predict the dollar drops in comparison to other currencies).

Some of these investments that I am considering are some Canadian Energy Trusts and Asian commercial REITs.  Both are sporting extremely high yields in many cases 10-20%.  Even with a predicted drop in distributions, a yield of 10% is fantastic.  And don’t forget the currency bonus.  The energy trusts have been beaten up due to the collapse in the price of oil which I believe long term is definitely going higher.

My goal is to seek the lowest risk in a foreign market, collect a high yield, and have my money out of the U.S. dollar.  I recently opened an ETrade Global Trading account so I can invest directly in some markets abroad such as the Toronto exchange and the Hong Kong exchange.  This is a first for me so there is definitely a learning curve.  If you have any resources that will help me get up to speed quickly on buying foreign exchange listed stocks, please leave a comment!

Portfolio Design

Also, I have been trying to do more analysis on what my portfolio looks like in terms of allocation of funds.  My two largest positions are Philip Morris Int’l and Apple.  I’m starting to get more nervous with Apple since I think the U.S. consumer is for the most part, dead.  They have such a strong company and strong vision, it is tough for me to let go.  I may be skimming my position at some point, but not yet.

The next portion is my gold exposure.  This has definitely increased in recent weeks and is also up big in the last few weeks as gold as taken off recently.

I’m hoping to add funds in the next few weeks to positions as described in high yielding foreign stocks which should give my portfolio a much better balance with minimal U.S. exposure.  Remember Philip Morris focuses strictly on cigarette sales outside the U.S.

Have a good weekend everybody.

3 Comments »

  • stephanie said:

    Kevin – You are in your 20s, right? Why are you so worried about short-term investments? The US economy will most definitely rebound in the long-term. It might take 5 or 10 years, but most of my accounts I don’t plan on selling off for another 25 to 30 years, minimum. Even if we are hurt in the short term, many economists think it will ultimately be good for us – right now people are learning to save and will be forced to live within their means, as credit is becoming less available. But once people have made it past the next few years, there will be much more money in savings and available to use for credit in the future.

  • kevin duffey said:

    Ultimately we will bounce back, I agree. But it might take 10-15 years of serious pain and we might have to go through a severe depression.

    I just don’t see the growth here that I see abroad. In places like Asia, there is years of real economic growth ahead based on production and investment and new businesses.

    We will have negative to flat growth in American for years I believe. Plus I’m severely negative on the currency. We might even have an utter collapse in our currency.

    The returns I get abroad will position me to take advantage of rock bottom prices here in the States down the road if we are able to restructure our economy and bounce back. That is a big IF though and we are not near those rock bottom prices yet.

  • stephanie said:

    Check out the New World Fund from American Funds. That’s where the money in my Roth IRA is invested. If you’re looking for a mutual fund instead of individual stocks you might like it. Obviously there numbers have gone down over the past few months like everyone else’s has, and they are a relatively new fund, but I really like their investment strategies. Its a little risky and definitely invested for growth, though, which not everyone is comfortable with.