Thursday, July 8, 2010

The New Trend - Asia ascendant

Get long Asia.

The long-term case for owning Asian assets versus assets in the U.S. and Western Europe is simple. Over the past 40 years, the Western world has cooked up a hellish stew of huge, unfunded entitlement programs, monstrous government debts, and vast populations who've adopted the "something for nothing" way of life. This produces a headwind for stock and property prices.

Asia isn't burdened with parasitic welfare states. Most Asians are poor… but they're working and saving like crazy in order to catch up to the rich Westerners they see on TV and YouTube. This produces a tailwind for stock and property prices.

Singapore sits in the center of Asian trade. It's one of the world's top-five financial centers. It's home to the world's largest water port. Most importantly, it's considered the world's easiest place to set up and conduct business.

While stocks of all kinds are suffering through massive selling pressure right now, EWS sits comfortably near a new 52-week high. Expect this "Asia up, the West not so much" trend to continue for decades.

You can see this uptrend at work with this chart Click on the heading above). It shows the price action in the Singapore investment fund (EWS).

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