MoneyMoose

It’s generally accepted that the value of the dollar is descending faster than the time I went skiing down Mt. Everest blindfolded. Turns out that the American currency isn’t that important after all. Gasp as you may - I know that anything American is better than anything not, blah, blah, blah, etc., ramble, but the dollar is indeed dropping.

“Oh no!” you cry, “What will I ever do? America is crumbling into ruins!”

Despair not, for there is hope. The situation isn’t that grim yet: we still have McDonalds and Starbucks. And, apparently, plenty of foreign investment opportunities that are growing exponentially.

“…The value of the greenback has fallen by nearly 15 percent over the past two years, and by nearly a third since 2003. And investors from Warren Buffett to George Soros predict the dollar will stay weak, as the nation’s $8.9 trillion debt grows by more than a billion dollars a day. That means an investment in foreign stocks comes with a built-in currency dividend, at least in the short term.

The case for buying foreign stocks has less to do with the shrinking dollar and more with the fundamental forces behind its decline. In many countries, the economy is growing far faster than the paltry 3 percent annual growth we’re now logging in the United States…mainstream economies in Europe and Japan are performing better than they have in decades…”

What reason could you possibly have to not invest overseas? All of those benefits seem to make it a clear choice. Hm-

“Americans underinvest overseas. The reason… is the same fear of the unknown that has long kept two thirds of Americans from traveling abroad. Known as the “equity home bias,” the tendency to keep a disproportionate share of your investments at home is rooted in a host of long-held but largely irrational fears. Hostile foreign governments, for instance, might seize the assets of private companies… U.S. investors also tend to feel that foreign accounting and legal standards are below those in the United States—even though our system produced the Enron and WorldCom debacles…. Or they worry that financial information about foreign companies is simply too hard to come by, even though Reuters, the Financial Times, and other companies have it covered.”

So there really is no reason not to send all of your money away overseas. Make sure you put a healthy portion into your Nigerian partner - they’ll always look after you.

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