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Consumption in developing nations jumped 231% between 2000 and 2012, according to Joseph P. Quinlan, chief market strategist at U.S. Trust. But what consumers spent in developing nations in 2013, was only 60% of what developed nations spent. “There is tremendous upside to emerging market consumer spending as more women in Africa become educated and enter the workforce; as more Chinese and Indian workers move from the farm to the cities and become urbanized shoppers; and as more consumers in the Middle East and Central and South America log on to the Internet and become connected to the world,” writes Quinlan.
He highlights two ways to invest in the emerging market consumer.
1. “The Power of Global Brands and America’s Competitive Advantage” — “The appeal of Western brands and an expanding middle class will continue to drive brand value, in our view. Some of the best plays on the expanding middle-class consumers in the emerging markets are outlined on the accompanying table.”
2. “China and the Coming Boom in Global Tourism” — “The world is shrinking, transportation costs are declining, new destinations are becoming accessible and new travellers/tourists from China and other places are taking to the roads, rails and sky in record numbers.” writes Quinlan. “Global brand leaders in hotels, airlines and other related tourist activities (including real estate) will be the primary beneficiaries of this trend.”
HIRSCH: ‘We Might Sell In May, But We Don’t Go Away’ (Investment News)
“Sell in May and go away,” is an often heard investing rule of thumb. Jeff Hirsch, editor-in-chief of the Stock Trader’s Almanac, tells Investment News that “we might sell in May, but we don’t go away.” Instead Hirsch is taking a defensive stance. “We tighten some stops, limit new longs and take some additional bond positions, usually through the iShares Core Total U.S. Bond Market ETF (AGG),” he said.
“The Fed is still very accommodative. Even with the tapering, rates are still at zero. And there is some decent economic data starting to show up. We are expecting some form of correction of maybe 10% to 15% over the next six months, but it doesn’t mean you have to just sell willy-nilly. You can sell some underperformers and take some defensive positions.”
4 Things To Consider When Selling Your Firm (The Wall Street Journal)
Jim Whiddon, director of investor enrichment for the BAM Alliance, sold his firm in his early 50s. In a new WSJ column he writes that it might make sense to make a sale sooner rather than later. Some of the factors that weighed on him were 1. His ability “to weather another financial storm;” 2. “Coping with new federal regulation was another factor in my decision,” by way of Dodd Frank; 3. “The rise of robo-advisers and online-advising solutions;” 4. It was also a matter of timing. “Close to eight million companies are set to be sold by boomer-age business owners over the next 15 years. That’s a demographic tsunami whose waves will be felt throughout the RIA space. The longer I waited to sell my firm the less attractive my prospects looked.” Whiddon writes that advisors should be flexible about their future plans and should perhaps consider selling sooner rather than later.
Investors Around The World Have A Huge Bias Toward Home (Mebane Faber Research)
This chart from JP Morgan, via Mebane Faber shows that global institutional investors around the world have a domestic bias.
Department Of Labour Delays Fiduciary Rule Proposal (WealthManagement.com)
The Department of Labour has postponed the its proposal for a fiduciary rule intended to reduce conflicts of interest to January 2015, reports Megan Leonhardt. “With the election, it was completely unsurprising and perhaps good news,” Knut Rostad, president of the Institute for the Fiduciary Standard told Leonhardt. “Fiduciary duty has received a beating in Washington. The outreach strategy needs a reboot; this extra time could prove hugely beneficial.”
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