Two roads have diverged
I have been observing a growing divergence in the answer to this question of recent times.
In Australia, it seems we have an increasing trend here of recommendations to invest abroad from financial advisers. And, it appears that a fad has emerged amongst Australian based fund managers to open an international fund as an addition to their local offering.
However, on the other hand, we have international investors looking at Australia and beginning to snap up our assets. From my recent memory:
- Graincorp was almost taken over by Archer Daniels Midland (an American firm) before our government intervened late last year
- David Jones has been acquired by Woolworths SA (a South African firm)
- Country Road has been acquired by Woolworths SA (the same South African firm)
- Wotif has been acquired this week by Expedia (an American firm)
So, is now a good time to invest overseas?
This chart sourced from the Reserve Bank of Australia (chart pack) might give some clues.
And, what this chart does not show is that in Europe, the German market (DAX) is at all time highs and the UK market (FTSE) is knocking on the door of 20 year highs.
Are these international investors and organisations buying our assets telling us something?
What is better value right now?
- US and European markets at all time highs due to monetary policy (money printing); or
- The Australian market that is nowhere near all time highs, has not had a recession in 22 years and has not required any money printing by our central bank.
Could it be that collectively we Aussies do not fully appreciate all that we have at this point in time?
This article is published by Dean Mico.
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