I find this really amusing…
With the Australian dollar at a significant cycle-high, the talk is on how cheap consumer goods are going to be in the next 12 months. Also, the fact that it's a great time for Australians to travel overseas for a holiday.
So this is the time to buy electronic goods and travel to your heart's content.
Zero talk about how to make money with the high Aussie dollar. The smart money knows what to do, but that's always a small percentage of the population.
With the dollar so high and going even higher, what is attractive right now is purchasing overseas assets.
Now I'm not just talking about real estate, overseas equity markets such as the US are incredibly cheap right now too.
I'm investing and researching several global opportunities. The US real estate market is an obvious one to me. It's depressed, has been for the last 24 months and only recently showing signs of life on the upside.
It's tough over there, really, really tough.
But you know what?
Thats exactly the environment that an investor wants. It's called, “blood on the streets.”
Sure, it's not good for the average family, but we must remember that investing is about numbers – not emotion.
But don't despair. While I say things are “depressed” and major indicators such as unemployment numbers would suggest that in the States, there are signs of a heartbeat on the upside.
Now this is an outlook going forward and perhaps a leading indicator that you'll never find coming out of any major media outlet, but my view is that we're in the early stages of a significant global recovery which will catapult Australia and its equity markets forward in a big way.
To get a handle on just how good the global economy outlook at the moment is, here is some interesting information.
Amex, that's right, the credit card company generated a 70% increase in profits in the third quarter. The reason why this is important is that the US consumer has started spending again despite the backdrop of high unemployment.
Card holders are spending more and there are fewer late payments.
World-wide transactions were up 14% and the US was just as strong.
There is no recession anymore in the US for those that have jobs, and as confidence grows, employment grows, the US folks who love spending will surge back and ignite a strong global resurgence.
So once this happens, and you see the Dow Jones consistently going up, regardless of what the opinions are of who follows who in the market, you'll see the Australian equity market/stocks rally strongly as well.
We could be seeing right now the lows of our stock market going forward in the next 6-12 months.
The rising tide that is currently building is going to float all boats. There is a significant wall of money on the sidelines, especially in the US that will be looking very soon to enter back into the market and get out of bonds which are yielding next to nothing in return.
So what does that mean for Australia?
Here's what I'm doing… Investing heavily into the stock market as well as the real estate market here. I'm not concerned about interest rates, I don't believe we'll get any rate hikes until 2011.
With the Aussie dollar as high as it is, the RBA would be concerned about the impact on our export markets if rates go up as well.
I'm also partnering with some astute real estate specialists in America to purchase a truck load of assets there. On top of that, I'm looking for a European vacation home somewhere in the Mediterranean.
Now of course, everything I say here is my opinion. Whatever your circumstances are, you have to consider them different to mine.
So I'm not rushing out to buy a 3D plasma screen or shopping till my heart's content on the internet… The moral of the story is focus on investing right now like you've never focused before because there are amazing times for us Aussies in the corner of the world that we live in for the next 3-5 years.
Signed with Success,
P.S. What are you doing right now investment wise? Or, am I completely off the rails, foolhardy and got it totally wrong? Remember, I don't just say stuff – I actually invest thousands, even millions in my opinion. Have a say below, love to hear your opinion…