Navellier Growth: your source for market-beating growth stocks

 

As I travel around the country meeting with investors I’m frequently asked, “Louie, should I invest internationally? And if so, where and how much?” The fact of the matter is, yes there are plenty of great stocks right here in the United States in which to invest. How to invest money, however, is sometimes less important than where to invest money. This means that we should never ignore the powerful opportunities we find around the rest of the world. My excitement on these new opportunities is added by the fact that globalization has created tremendous economic growth around the world adding even more places where we can begin investing money daily. To top it off, many of the world’s most exciting profitable companies are now headquartered outside of the United States. The U.S., while still a significant factor in world financial markets, is no longer the preeminent place to invest as we move into the new century.

The fastest growing economies around the world offer significant opportunities for growth. This fact has grabbed the attention of more and more investors over the past few years. As both individual and institutional investors become more and more aware of the exciting growth opportunities available around the world, money has begun to flow into international mutual funds at twice the rate of those investing exclusively in the United States.

Numbers too powerful to ignore

I became aware of how powerful the global growth situation was when my staff and I began to find more and more foreign stocks showing up when we checked our database for the very best growth stocks each week. As they showed up too frequently to be a fluke I asked my team to do a little research to find out how those foreign stocks performed when compared to our U.S. stocks. What we found was an amazing, albeit pleasant, surprise.

From January 1997 to December 2006, the top 10% of global stocks had soared over 1,000%!  In comparison, the S&P 500 rose only 118% during the same time.   That meant our global picks outperformed the U.S. market nearly 10-to-1!

As my team and I investigated further we found a lot to like about global growth stock investing. Much of the money invested around the globe is by index funds or primarily value oriented mutual funds. Growth stocks do not appear to get the same type of research and investigation as they do here in the United States—so there is a host of great stocks flying under Wall Street’s radar. Second, since we only chose global stocks that trade here in the U.S. in the form of American Depositary Receipts (ADRs), there is a shrinking supply of foreign stocks. So even as demand for these stocks are dramatically increasing, the supply of shares is shrinking. Much of this phenomenon has to do with the reluctance of foreign issuers to personally vouch for their financial reports each quarter to the U.S. government. They have no interest in being exposed to the world’s most litigious society! We also find that global stocks tend to zig when U.S. stocks zag thus helping to decrease the overall volatility of an investors portfolio.

How to Invest Money

So when investors ask me, “Louie, should I invest globally?” I answer absolutely!  “How much” depends on your risk tolerance.  For conservative investors I recommend about 10% of your portfolio be allocated in global companies. If you prefer to be more aggressive you can increase that percentage accordingly.

Where to invest depends on where the buying pressure is the greatest.  As I mentioned, ADRs have the unique situation of enjoying increasing demand, coupled with a decreasing supply.  This opens the door to tremendous profits! Think of all the money that’s flowing into so little a number of stocks.  I tell investors to think of it like a fire hose--with the water pressure filling up and about to blast right out!

So as you might imagine, after my team and I uncovered the 10-to-1 market-beating potential of our top global stocks, we took full advantage and launched a trading service called Global Growth.  And ever since we’ve seen gains such as 91% in Air France in 38 weeks, or 88% in 45 weeks from Switzerland’s ABB Ltd., or 29% gains in just 32 weeks from China’s Seaspan. And that’s just to name a few.

In 2007 our entire Global Growth Buy List performed nine times better than the S&P 500, proof that global investing is not just a short-term fad.

Could you find enough stocks to invest just in the United States? Of course you can and for many years we did so. But adding global growth stocks to our portfolio adds to our potential return, helps lower portfolio volatility and allows us to participate in some of the fastest growing economies and companies in the world today.

To learn more about my Global Growth service, click here.

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