Recent financial market trends support my belief that the engine for the global economy has moved to Asia. The recent article in the New York Times Asia Leads the Global End to Cheap Money, seems to support my view as well. The implications for investors feel straightforward. Globally, there will be relatively less money as interest rates and banking reserve requirements are used to control money supply. With lower inflation year to year, investment rewards will accrue to those who fund projects that produce real goods and service profits. Yet, uncertainty exist.
Producing energy alternatives to oil and increasing water availability appear to be two significant needs. A few investment fields strike me as less desirable—probably a function of experiences in the US—Health Care in the USA and Financial Services. Both would appear to have had their run in accruing profits at exorbitant levels. Betting for continued profit growth in the face of the reform and regulatory pressures feels foolhardy.
Time and attention to asset allocation is the path toward achieving financial goals