Investing on Obama's Advice
In U.S. President Barack Obama's speech to Asia-Pacific leaders at the APEC Summit in Singapore over the weekend, he highlighted the importance of a strong China economy in the context of global growth.
"The United States does not seek to contain China... On the contrary, the rise of a strong, prosperous China can be a source of strength for the community of nations."
Translation: The U.S. must look to Asia for growth or risk being left behind. It is important to shift from a primarily consumption driven economy to one that embraces exports and global trade; America simply cannot rely on just the US consumer to spur lasting economic growth.
Investors should similarly embrace this reality in their investment strategy as well.
This means picking up companies that have shown to subscribe to new economic truth.
Multinational companies like Johnson and Johnson and McDonalds will likely continue their push into emerging economies.
Technology and infrastructure companies like Apple and Caterpillar know that providing world-class products for consumers and businesses is the path to greater profits.
Exports now matter more than ever before and companies that operationalize this understanding are poised to do well.
Also, investors need to watch the international revenue trends in companies they are hoping to invest in. These companies should have a coherent, actionable plan for global growth.
Also, investigate if company leadership recognizes the new economic world. Smart companies adapt, eventually irrelevant companies don't; it's that simple.
And the consequences of business as usual in a rapidly changing environment means lower investment returns for you.
It's common to hear that the United States is falling by the wayside as the world grows and expands. This need not necessarily be true and Obama is outlining a way forward for American economic growth.
While there is strong disagreement about public policy decisions, there is one clear consensus -that the U.S. must be a participant in helping emerging economies expand and prosper, or risk losing out.
Editor's Note: Disclosure - Yoshikami does not personally own any of the above recommended stocks.
Michael A. Yoshikami, Ph.D., CFP®, is Founder, President, and Chief Investment Strategist of YCMNET Advisors, Inc., a registered investment advisory firm (www.ycmnet.com). He oversees all investment and research activities of YCMNET. He is a respected lecturer speaking frequently on market issues, tactical asset allocation, and investment strategy. Michael and YCMNET were ranked as one of the top investment 100 advisors in the United States for 2009 by Barrons. He appears regularly on CNBC and CNBC Asia and can be reached directly at email@example.com.