The Best Place to Invest For Americans
Wednesday, September 27th, 2006
By Michael Lombardi, MBA for Profit Confidential
Here’s a quick quiz for my PROFIT CONFIDENTIAL readers:
What is the only country in the Group of Seven Industrialized Countries (G7) running an annual surplus that it uses to pay down its debt?
If you answered Canada, you are right. For the past three years I’ve been hinting, suggesting, and even begging my American readers look to Canada as a good place to invest. We even started a daily column in PROFIT CONFDEINTIAL where investment expert Inya Ivkovic tolls the virtues of investing in Canada. And, over the past 36 months, the Canadian dollar has increased in value by 28.6% against the U.S. greenback.
What’s the growth in the value of the Canadian dollar mean for American investors? It often means if you buy a stock on the main Canadian stock exchange, the TSX (the Canadian equivalent of the NYSE), you are seeing both price growth of your stock and your investment because you are buying in Canadian dollars that keep rising against the U.S. dollar.
Just to give you an idea, if you had invested in the basket of stocks which make up the S&P/TSE Composite (the Canadian equivalent of the Dow Jones Industrial Average) three years ago, you’d be up today by 55%. If you are American, your return on U.S. dollars would actually be 71% because you can cash in your investment today for more U.S. dollars today than you put in three years ago.
I really believe the Canadian dollar will keep rising in value against the U.S. dollar because the Canadian Federal Government is focused on reducing its debt… a stark contrast from the U.S. The Canadian Federal Government racked up a $13.2 billion surplus last year. That money will be used to bring down total Canadian government debt to only $481 billion (the equivalent of about the U.S. annual deficit). The national debt of Canada as a percentage of the country’s GDP is now at a 24 year low.
Canada is also rich in resources, metals, and minerals– commodities the U.S. and China demand. I continue to believe Canadian stocks offer great value, especially for American investors.
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Tags: GDP, stock market, U.S. dollar
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Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter
