Should You Invest in the USA?

By Jason Fittler

Hindsight is always perfect, with hindsight we can see the mistakes we have made.

But this is not the purpose of hindsight. I think hindsight should be used to make observations on the future.

Australia has seen a fantastic recovery over the past 6 months. Profits have been made, retail sales in Australia have recovered quicker than the rest of the world. We are now worried about inflation, interest rates have moved up with it our dollar.

In hindsight we all would have invested the farm back in March 2009.

Australia is only 3% of the world markets, the largest - the USA - is yet to see retail sales bounce like they have in Australia, interest rates are still low, companies have not gone through the capital raisings we have seen and their dollar is weak. Does this sound familiar?

Think back to March 2009 and the same was being said about Australia. Given that the USA has not seen the economic improvements of Australia and now knowing what these improvements meant to our market, we should use hindsight to take advantage of the gains to be made in the US.

There are two key reasons to invest in the US.

First, at some point in the future retail sales will improve over there, with it we will see some positive economic growth.

Second, our dollar is sitting at the top of the range, if the US dollar starts to strengthen this will benefit your overseas investments. I think right now is a good time to start building exposure to this market.

Do not bet the farm, but look to be involved. 

Hindsight will let me know if I am right.