Thursday, February 23, 2012

Half Sigma: HBD investing: buy Australia

What?s the benefit of knowing the truth about HBD if it doesn?t make you money? But the HBD blogosphere is severely lacking in good HBD investment advice.

Although I believe in the future of China, I don?t think this is a good place to actually invest your money. My recommendation is to invest in Australia, and there?s a really easy way to do this buy buying the EWA ETF. If you have a brokerage account with TD Ameritrade, you don?t even have to pay a commission when buying the EWA (or 99 other commission-free ETFs).

The key to Australia?s future is:

(1) The population is 92% white, and the non-white population is mostly Asian (a good minority). There are also some aborigines (a bad minority) but they are only 2% of the population.

(2) Unlike the United States, Europe, or Japan, Australia has only a tiny budget deficit and may run a surplus in the near future, and total debt is only 30.3% of GDP (according to the CIA World Factbook).

(3) Australia exports a lot of raw materials to China?s growing economy. So if you think that China will continue to grow, the place to invest is Australia and not China.

(4) The EWA has a 4.6% dividend yield. Wow! That?s a lot more yield then you?ll get by investing your money in the United States.

(5) If the U.S. dollar ever ceases to be the world reserve currency, there will be a collapse in the price of the dollar. So it?s smart to have investments in other currencies. Especially a quality currency like the Australian dollar.

* * *

However, there may be a housing bubble in Australia. But some argue that there's nothing to worry about.

Source: http://www.halfsigma.com/2012/02/hbd-investing-buy-australia.html

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