 |
While a lot of folks were spending December 25 opening presents, my family and I were hurriedly packing our bags and running off to the airport.
Sure, my daughter managed to score a few small presents before we left, but my wife and I would much rather give her the gift of travel whenever possible.
That’s why we decided to head to India this holiday season (with my in-laws in tow)!
Being here is a great way for all of us to bond with Disha’s family members who still live in Bombay and its outlying areas.
And it’s also a wonderful opportunity for me to do some real on-the-ground research about the sweeping changes taking place in Southeast Asia.
So What Have I Seen in
My First Few Days of the Trip?
We’ve been bumming around Delhi so far. And while I expected lots of museums, wonderful shopping destinations, and terrific scenery … I’ve still been surprised at just how cosmopolitan the city really is.
It’s a sign of globalization that you can now get a cappuccino here almost as easily as you can get a chai.
 |
| McDonald’s is one of the many U.S. companies profiting from India’s growing middle class. |
Likewise, you can grab a veggie burger from a local McDonald’s … pick up a tube of Colgate toothpaste … or buy a pack of Marlboro cigarettes.
We have yet to get out into the rural areas, but I expect to find John Deere tractors plowing some of the fields and Dell computers inside people’s flats, too.
My point?
U.S. companies — especially the ones with big brand names — are absolutely profiting from the rise of a consumer class here in India.
Many of these companies pay out big dividends, too.
And with the U.S. dollar in a rut, these very same firms also benefit from their substantial foreign sales.
Remember …
A Beaten-Down Dollar Helps U.S. Companies
With Large International Operations!
Sure, our trip is costing us a bit more because the rupee has appreciated against the dollar.
But at the same time, a lot of my favorite investments are cashing in from a weaker domestic currency.
A quick refresher on how this works:
When a U.S. company sells a toothbrush or a can of soda in India, it prices that item in rupees.
But eventually, it translates those sales in rupees to greenbacks. So when dollars have weakened against rupees, that equates more U.S. currency in the firm’s coffers.
As a side note: This same phenomenon also allows U.S. companies to compete more effectively on the world stage since they can price their items lower and still make their numbers.
 |
| U.S. investors can benefit from a falling dollar. |
Now, taking this one step further …
Let Me Also Show You Why U.S. Investors Can Benefit by Owning Foreign Dividend Stocks
Obviously, there are also plenty of attractive foreign companies operating here in India.
And again, currency exchange rates can have a big impact on how U.S.-based investors fare when they own these firms.
Essentially, investors can still benefit from dollar weakness … but they will do so for two possible reasons that happen on the investment level, not the corporate level:
- Because the shares they’re buying were originally priced in a foreign currency, their dollar value can fluctuate with exchange rates.
- Any dividend payments received are issued in foreign currency then translated into greenbacks, which means they can go up or down based on currency exchange rates.
The caveat is that a strengthening U.S. dollar will obviously have the opposite effects.
But even then, you’re at least getting a stake in different markets and you still have the potential for solid capital gains and income regardless of the currency drag.
Really, my overall point is that many dividend-paying companies — whether based in the U.S. or overseas — are clearly operating on an international stage these days.
After just a few days in Delhi, that much is obvious!
And with a shrinking world comes a number of new investment angles to think about … new ways to profit … and new ways to diversify our portfolios.
Best wishes,
Nilus
About Money and Markets
For more information and archived issues, visit http://legacy.weissinc.com
Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Nilus Mattive, Claus Vogt, Ron Rowland, Michael Larson and Bryan Rich. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Kristen Adams, Andrea Baumwald, John Burke, Amy Carlino, Selene Ceballo, Amber Dakar, Dinesh Kalera, Red Morgan, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.
Attention editors and publishers! Money and Markets issues can be republished. Republished issues MUST include attribution of the author(s) and the following short paragraph:
This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://legacy.weissinc.com.
From time to time, Money and Markets may have information from select third-party advertisers known as “external sponsorships.” We cannot guarantee the accuracy of these ads. In addition, these ads do not necessarily express the viewpoints of Money and Markets or its editors. For more information, see our terms and conditions.
|
© 2009 by Weiss Research, Inc. All rights reserved. |
15430 Endeavour Drive, Jupiter, FL 33478 |
