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Welcome to Profit Confidential • Tuesday, May 22, 2012

Foreign Markets Worth Watching

Thursday, September 29th, 2005
By George Leong, B.Comm. for Profit Confidential

Are you focusing your capital entirely on U.S. stocks? If you are, then I have to deliver bad news — you are missing the boat to the land of the rising sun.

 In recent columns, I have talked about the strong performance of stock markets in Asia. I specifically pointed out India, Japan, and South Korea. The Asia-Pacific region is trending higher at a time when U.S. and European markets are taking a breather and struggling.

 In Asia, the next world power will be China, like it or not. The latest GDP growth was in excess of 9%, and the country is continuing to attract foreign capital. On Tuesday, a Swiss banking powerhouse invested 645 million Swiss francs ($500 million) in state-owned Bank of China. Moreover, UBS is also looking at investing $210 million in Beijing Securities Co. Ltd. The Chinese will open up its banking sector to foreign investment in 2006, and I expect to see a slew of investments go there. And it only helps when there is a middle class of over 200 million people!

 In Japan, the benchmark Nikkei 225 Index touched a new four- year high at 13,435.91. The recent strength of the greenback against the yen helped to drive exports. So while the majority of key U.S. markets are down on the year, the Nikkei 225 is up a whopping 26% so far in 2005. In mid-June, the Nikkei 225 gave us a bullish signal after breaking above its 20-day, 50-day, and 200-day moving averages, where it remains at this time. The trend is bullish, signaling additional gains.

 But take a look at South Korea. The key Korea Composite Stock Price Index touched a record high of 1,228.57. Strong trading of South Korean banks drove the buying on upgrades from S&P. The index is up a stellar 53% in 2005 and has been a roaring tiger amongst the Asian countries.

 You want to have some capital in Asia these days through American Depository Receipts (ADRs), Exchange Traded Funds (ETFs), or Asian Mutual Funds. Investing outside the U.S. gives you some geographical diversification for your portfolio, and you can’t ignore the potential returns!

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Profit Confidential AuthorGeorge is a Senior Editor at Lombardi Financial, and has been involved in analyzing the stock markets for two decades where he employs both fundamental and technical analysis. His overall market timing and trading knowledge is extensive in the areas of small-cap research and option trading. George is the editor of several of Lombardi’s popular financial newsletters, including The China Letter, Special Situations, and Obscene Profits, among others. His trading advice on stocks and options is also found on his daily trading site, Daily Profits. He has written technical and fundamental columns for numerous stock market news web sites, and he is the author of Quick Wealth Options Strategy and Mastering 7 Proven Options Strategies. Prior to starting with Lombardi Financial, George was employed as a financial analyst with Globe Information Services.

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