The Importance of Investing Outside of North America Could Increase

The markets today Tuesday, appear poised to open generally on a negative note with most major American and European indicators very much in the red at time of writing. In one exception, the NASDAQ is in the green, in anticipation of Apple’s plans to unveil the iPhone 12. In another exception, the TSE 60 in Canada is in the green at time of writing.

These indicators can change at any time before or after the opening bells.

Not surprisingly, the safe havens of gold and silver are in the green at time of writing.

Downward pressures appear caused by bank reports expected today including strong drops by JP Morgan Chase and Citigroup, along with renewed virus fears, some vaccine doubts including Johnson & Johnson’s pause in its trials and the continuing lack of agreement on stimulus in Washington

For those who want to divert some of their investment dollars away from these pressures, Vietnam merits some consideration. A recent report by the Qatar National Bank re-affirms its view that Vietnam is an ‘Ascending Dragon for its geographical shape and economic strength and resilience’.

QNB says that efficient border closures and contact tracing allowed Vietnam to weather the first wave of the pandemic better than many countries. The bank also points out that a second wave occurred in Danang but that the Vietnamese focus on contact tracing enabled authorities to bring the virus under control with limited disruption.

Moreover, despite the pandemic and weakened global demand, Vietnam’s exports hit a record in August, driven by strong demand for electronics which account for 40% of total exports, according to the bank.  Exports to the United States have risen by 20% year-over year, driven in part by trade tensions between the United States and China. Importers have shifted away from China to avoid U.S. tariffs. Vietnam also benefits from the free trade agreement with the European Union that was implemented in August.

QNB projects gross domestic product growth in Vietnam at 2.9% for this year, no small feat given the pandemic. If that projection crystallizes, Vietnam would likely become the best performing economy in the region. This would likely result in Vietnam being the best-performing economy in the region. QNB suggests that in the event of spikes in new infections, the government’s track record suggests its ability to contain the virus with minimum economic disruption.

In the bigger picture, the importance of investing outside of North America increases in proportion to the pressures at work within North American markets. The desirable weightings and sectors will vary from time to time and from investor to investor and are best discussed at length between investor and licensed financial advisor. In fact, during these times, this may be one of the most important topics at their meetings. It would not be counter-productive for advisor and client to have the discussion at least twice: once immediately and again when the proverbial dust settles after the upcoming election.

Disclosure: I am not and have never been a licensed financial advisor. However, as a journalist I have interviewed upwards of 300 advisors in several countries over the years and believe that I understand what they bring to their clients

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