As one of the most shocking and dismal economic years of our time comes to a close, it deserves a moment to take a look at the vast shifts which have transpired. Major banking giants which have fallen, stock markets have plummeted, and a whole host of issues have reared their head for the coming year. Yet, as we look ahead there are quite a few points of optimism. There are strong buying opportunities, and a sense of worldwide cooperation – both for investors, and for international leaders – which is arguably unique to this crisis, and will undoubtedly shape the next wave of future international financial decisions for the coming generation.

First, a quick, partial summary of international stock markets for the last year:

Developed:

US -42.32% UK -34.31% Germany -42.15% France -44.28% Italy -48.91% Belgium -54.96% Spain -40.69% Scandanavia -51.09% Netherlands -52.63% Russia -65.72%

Emerging:

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If you haven’t heard yet, then you probably will some point on Monday: Japan’s benchmark Nikkei 225 Stock Average closed in the red on Friday, marking its 12th consecutive decline, the longest since a 15-session losing streak in April-May 1954 during a time of “economic uncertainty” after the end of the Korean War. However, the current losing streak is likely to end over the next day or two, as buyers emerge and tip the close into positive territory. No plunge protection team at work that we know of and largely unnecessary, because even though the Nikkei 225 has declined just over 8.5% during the losing streak, over half of the losses have been limited to double-digits, with most of those being very small in percentage terms. That said, we’re not expecting a strong bounce back, although maybe, perhaps a gradual one, since recovering even 14,500 remains a big hurdle. Know that there’s ...

Happy July 4th!

A reader asked for my two cents on foreign country selection.

This may be difficult to articulate into something that usable because there is an element of gut feel at times and also a lot of my groundwork was laid quite a few years ago and so now it is more about following developments.

The way I view things the best type of country is one that offers the best chance for diversification and that means countries that are at different points in their economic cycles and by extension different stock market cycles.

This doesn’t always hold up (Oz down a lot this year, Norway down slightly, Canada (EWC) up a hair and Brazil (EWZ) up a little) but over time it works often.

Another category of country would be developed countries that right or wrong I think have a chance to outperform the US over the course of the stock market …