Following the Money Leads Investors to International Markets

This is a sponsored post written by The Cheat Sheet on behalf of Nationwide®.

illustration of globe in hand

Search around the world for potential customers | Pixabay

“Follow the money” is a useful catchphrase for investors. When investors follow the money of a business, all roads lead to customers. Without paying customers, businesses fail.

The world is filled with potential customers, but American investors who avoid international markets could miss opportunities, especially since foreign incomes are growing. A recent study from Pew Research Center finds the number of middle-income residents — defined as living on $10-$20 per day — in 111 countries nearly doubled from 398 million in 2001 to 783 million in 2011. Almost 670 million people over the same period moved out of poverty.

Growth in the middle class is largely concentrated in particular regions, such as Eastern Europe. “The region experienced significant economic contractions after the fall of the Berlin Wall in 1989, but many nations reclaimed economic ground in the first decade of this century,” explains the report. “Examples from the region include Belarus, where the share that is middle income rose from 21% in 2001 to 53% in 2011, and Romania, where the share increased from 6% to 25% over the same period. In the region overall, the middle-income population increased by 39 million.”

Several countries are also surpassing the United States in terms of the percentage of people living on more than $50 per day. In fact, Norway, Luxembourg, Denmark, the Netherlands, Iceland, Germany, Finland, and Canada all house a larger high-income population than the U.S. As recent as 2001, Denmark, Germany, and Luxembourg all trailed the U.S. on this measure.

While the U.S. and Europe are home to most of the world’s advanced economies, Europe is the winner in terms of income growth. In the U.S., the share of the low-income population inched up from 17% to 18%, compared to Europe where the low-income population was cut in half from 31% in 2001 to only 15% in 2011.

America is still the beacon of capitalism, but ignoring the other bright spots around the globe may dampen portfolios. Even Warren Buffett, one of the biggest American bulls you’ll find, sees opportunity in Europe. Investors looking to capture growing incomes and diversify their portfolios should consider international investments.

This is a sponsored post written by The Cheat Sheet on behalf of Nationwide®.

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