Dare Forward
Trade in Whisky;
It is no great surprise that I am finding good value in the UK and Europe, more so than in the US. This chart says it all. I have seen most charts at some point, but never this one before. It cleverly estimates how exposed foreigners are to US equities using Federal Reserve data. The answer is that foreigners are all in, just as they were 23 years ago.
It is logical that a country’s stockmarket valuation would be heavily influenced by foreign capital flows. After all, it is always the case that some country’s stockmarkets are cheap, while others are expensive. Currently, the USA is expensive, while the rest of the world offers better value.
I heard that young Koreans have no chance of buying a house, so they buy the Nasdaq instead. If you take the 80-year average exposure to be 40%, meaning foreigners own 40% of US equities. As shown in the chart above, they are currently at 57.3%. This was last seen in 2000 during the dotcom boom and never before.
That means 20% of the world’s ex-US investment funds have been diverted, which explains the cheapness of European and Asian markets. This is why we find cheap companies outside the US more easily than inside. Here is another.
Trade in Whisky
The Multi-Asset Investor is issued by ByteTree Asset Management Ltd, an appointed representative of Strata Global which is authorised and regulated by the Financial Conduct Authority. ByteTree Asset Management is a wholly owned subsidiary of CryptoComposite Ltd.
General - Your capital is at risk when you invest, never risk more than you can afford to lose. Past performance and forecasts are not reliable indicators of future results. Bid/offer spreads, commissions, fees and other charges can reduce returns from investments. There is no guarantee dividends will be paid. Overseas shares - Some recommendations may be denominated in a currency other than sterling. The return from these may increase or decrease as a result of currency fluctuations. Any dividends will be taxed at source in the country of issue.
Funds - Fund performance relies on the performance of the underlying investments, and there is counterparty default risk which could result in a loss not represented by the underlying investment. Exchange Traded Funds (ETFs) with derivative exposure (leveraged or inverted ETFs) are highly speculative and are not suitable for risk-averse investors.
Bonds - Investing in bonds carries interest rate risk. A bondholder has committed to receiving a fixed rate of return for a fixed period. If the market interest rate rises from the date of the bond's purchase, the bond's price will fall. There is also the risk that the bond issuer could default on their obligations to pay interest as scheduled, or to repay capital at the maturity of the bond.
Taxation - Profits from investments, and any profits from converting cryptocurrency back into fiat currency is subject to capital gains tax. Tax treatment depends on individual circumstances and may be subject to change.
Investment Director: Charlie Morris. Editors or contributors may have an interest in recommendations. Information and opinions expressed do not necessarily reflect the views of other editors/contributors of CryptoComposite Ltd. ByteTree Asset Management (FRN 933150) is an Appointed Representative of Strata Global Ltd (FRN 563834), which is regulated by the Financial Conduct Authority. https://register.fca.org.uk/
© 2024 Crypto Composite Ltd
