I recently returned from a 2 week vacation in the US (it was great to briefly escape the miserable Auckland winter!).  While in the States, I couldn’t help make a few very unscientific observations, based purely on what I did and what I saw:

  • The parts of the US economy most visible to a tourist appear to be thriving.  I’m talking airports, hotels, shops, restaurants, night spots, attractions, etc.
  • The scale of the US (and the US economy) is just so big.  You notice this particularly when you see the size of the transport networks, the massive ports, criss-crossing airport flights, vast industrial areas, and extensive competition for just about everything.
  • More than any previous overseas trip, I was totally reliant on the services of major US technology companies.  I used Google Maps and Google searches constantly; I stayed connected via Microsoft OneDrive and handled emails with Outlook; transport was often via Uber or Lyft;  I shopped on Amazon and ebay; I Facebooked.   I didn’t however use any Apple product or service (and probably never will … some habits die hard!)

From an investment perspective, everything I saw and did highlighted the importance of having highly diversified investments.  In this part of the world we have no exposure to the huge US technology sector (Apple, Google, Microsoft, etc), let alone other huge sectors such as automotive and pharmaceuticals.  The US economy is surging ahead, while the NZ economy is slowing.

And lets not forget that the market capitalisation of US stocks is around $30 trillion or just under half of the world’s market cap.  The US is big!  Stock prices have risen significantly over the last few years, but are supported by very strong company earnings.

Granted, there is an unstable president at large in the White House, but despite this, the US seems to be surging forwards, and still looks to me like a good place to invest.

 

Dean Edwards 

 

 

Musings from the US

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