2. The World is Getting Smaller (and More Prosperous)
In 1492, Columbus spent months reaching America. Today you can send a package overnight, or communicate instantly by email. As world economies grow ever more integrated, a rising global middle class is demanding a broader range of goods and services. Investors can potentially benefit by owning global equities.
As you can see in the chart above, while the U.S. market for cars, computers and cell phones is relatively mature, there is still significant potential demand for these products in China, India and Brazil. This untapped potential for consumerism translates into growth opportunities for companies doing business in these markets.
The Bottom Line
- Globalization has blurred the lines between investing in the U.S. and investing overseas.
- As the growing middle class collectively aspires to the goods associated with the wealth of more developed nations, this increases global consumption, drives global trade, produces investment opportunities and drives stock markets.
- Speak to a financial advisor for help taking advantage of an increasingly global economy.
Another reason to be an equity investor: Innovation Will Surprise Us... Again
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