In the United States, we used to be able to chant, ???We???re No. 1; we???re No. 1.??? Well, we can???t do that anymore — at least when it comes to the size of our economy.
According to the International Monetary Fund, when you measure national economic output in ???real??? terms of goods and services, this year China will produce $17.6 trillion vs. the United States, which will produce $17.4 trillion.
Although there is, of course, more to the question of economic supremacy than one number, according to this nonetheless important metric, we aren???t No. 1 anymore. That distinction belongs to our neighbors in the Far East.
Investors should embrace this unseating, because when it comes to investing in international markets, size does matter.
Take a look at the two-year chart here of the Shanghai Composite Index ($SSEC). As you can see, Chinese stocks trended lower from early 2013 through mid 2014. Since then, however, there has been a huge rebound in Chinese stocks.
This big rebound has taken place for a combination of reasons, such as reforms in China’s stock market, an interest rate cut by the People???s Bank of China and economic growth stabilization.
I suspect that this trend will continue in 2015, as investors may try to use momentum in international markets to their advantage and domestic stocks rise to technically overbought levels. Then there???s the issue of the increasingly strong U.S. dollar, which could actually have a negative effect on U.S.-based equities.
In my Successful ETF Investing advisory service, we???ve been on board the China train for some time, and my subscribers currently are profiting from several funds pegged to the fate of the new global economic No. 1.
If you???d like to find out more about how you can make money investing in China, check out my Successful ETF Investing newsletter right now.
If it was up to me
I would???ve figured you out
Way before the year clocked out???
–Coheed and Cambria, ???The Suffering???
This time of year, we tend to start looking back and trying to figure out what we did well, and what we did wrong, during the previous 11-plus months. This can be a valuable undertaking, but just make sure you remain objective when doing so. Objectivity in this exercise is the key to improving on shortcomings in the following year.
Wisdom about money, investing and life can be found anywhere. If you have a good quote you???d like me to share with your fellow Weekly ETF Report readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.
In case you missed it, I encourage you to read my e-letter column from last week on Eagle Daily Investor about the benefits offered by investing in ETFs. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.