US Farmers Struggle

A recent article in Bloomberg notes that US farmers struggle due the loss of Chinese customers. American exports of soybeans to China have suffered due to the trade war and China and farmers are looking for new markets.  American farmers, who generally supported Trump ae having second thoughts and even feeling betrayed. The Bloomberg article dwells on the how many farmers have lost their farms or are dealing with chronic stress-driven psychological issues compounded by the loss of their biggest market for soybeans and other crops.

Trump and the Value of Farmland

Although many farmers deal with huge amounts of stress and often have unprofitable years back to back in places like Iowa they use the value of their land to obtain credit to stay afloat until a good year or two. Generally the value of farmland has gone up yearly. However in 2024 and 2025 farmland has gone down in value in Iowa in the heart of the American Corn Belt. This compounds the difficulties facing American farmers on top of the loss of markets and widespread belief that the man they believed in and helped elect president has abandoned them.

Reduced Governmental Support for Farmers

As a partial remedy for the many risks that farming entails, the US government has for years funded various support programs. These include technical assistance for conservation efforts, disaster assistance, crop insurance programs such as PLC and ARC, government funded support and financial aid such as grants and loans from the USDA Farm Service Agency. Additionally, the government has paid for food via Medicaid, and the Supplemental Nutritional Assistance Program which provided another market for farm produce. All of these have been subject to budget cuts or are in danger of cuts. The Food for Peace program has been cancelled which was another program that provided at “market” for farm production. All of this compounds the problem caused by Trump’s trade war and loss of China as the biggest market for US farm exports.

Safest Agricultural Investments

Over the years it has been safer and more profitable to own farmland and rent it out to someone to do the work and incur the risks of doing the farming. The value of farmland has increased over the years with some variability and the usual way to rent the land is to receive a check on March 1 and never be involved in worrying about crop prices, weather, or the cost of feed, fuel or crop insurance. However, it remains to be seem whether or not farm prices will continue to increase over the years if there is permanent decrease in markets for farm produce and permanent decrease in government support programs.

Investments When Interest Rates Are Low

Fidelity recently published and article about investments to consider when interest rates fall. In anticipation of steadily lower rates one could buy bonds and other securities at a fixed rate and then see the relative yield go up when rates fall. But once rates are lower treasuries and bonds become less attractive compared to stocks. The Fidelity article covers bonds, etc. at some length but says nothing about stocks and other investments.

Stock Investments When Interest Rates Fall

Investments that tend to benefit from lower interest rates include industrials, tech stocks, utilities, financials and insurance companies, home builder, real estate, and consumer discretionary stocks. Utilities are often seen as an alternative to bonds as they pay dividends that are similar to interest yields on bonds and still have the potential for long term appreciation, which bonds and treasuries do not have. As we saw in the aftermath of the Financial Crisis as well as the aftermath of the Pandemic, big tech tends to rally when interest rate costs are low. Part of this is because the cost of doing business is lower in a low interest rate environment and part is because when rates are dismally low, almost any stock will look attractive because of its potential for both long and short term appreciation.

Fed Funds Rate

Choice of Investment Independent of Current Interest Rates

Stock traders can profit from buying and selling around the time of Fed Rate announcements as the market is so closely tuned to expectations of rate changes. However, over the longer term a company needs to have a strong product line, good R&D, and sound fiscal management in order to grow and reward investors. Thus, your choices of stock investments should not be made blindly based on interest rate cuts. The better approach is somewhat like that of intrinsic value investors. Choose a solid stock with all of the right qualities and invest using dollar cost averaging. This way you will buy fewer shares when prices are high and more when they are low. And, like with intrinsic value investing you will have picked a stock with strong, long term growth potential!

How Low Are Interest Rates Likely to Go?

At the current time we are only looking a rate cut of a quarter percent. Predictions are that mortgage rates could fall to the 4% range. This is noting like the aftermath of the Financial Crisis when rates fell to near zero in the US and into negative territory elsewhere. All of this assumes that Trumps’s tariffs do not cause a broader trade war and global economic meltdown. If that were to be the case, or if Trump succeeds in taking over the day to day operations of the Fed, then rates similar to the post-Financial Crisis era would be possible. If that happens CDs, bonds, and treasures would prove negligible returns and the investing world would double down stocks, likely causing a significant rally. One should not be hoping for a global crisis but being aware of this possibility could help one position themselves in the stock market beforehand. An economic collapse would drive the market down only to see it jump higher with near zero interest rates.

Japan’s Economy and Coping With Unique Japanese Issues

The New York Times published an insightful article last year about what happened to Japan after its economic collapse at the end of the 1980s. It helps explain how a major world economy seemed unable to climb out of an economic hole of its own making. It also sheds some light on what to expect from China’s economy which has some of the same problems that Japan had but does not likely have the wherewithal to deal with issues as successfully.

At the end of the 1980s Japan’s stock market rivaled or even surpassed that of the US. The Japanese were buying US assets like Rockefeller Center, the Pebble Beach Golf course in California, and Colombia Pictures. Popular books like the Rising Sun by Michael Crighton portrayed the Japanese rise to dominance as sinister and a threat to the West. Coincidentally, Japan’s meteoric rise stopped and reversed. A mountain of hidden debt helped torpedo the Japanese economic miracle. But there is more to the story. It has to do with Japan’s low birth rate, aversion to immigrants, declining population, and fewer workers.

If you look at Japan’s GDP as it relates to the working population, it compares favorably to the USD since 1990. According to the St. Louis Federal Reserve, US and Japanese GDP per worker were equal in 1994 at the beginning of Japan’s apparent economic stagnation. By 2023 US GDP per worker had gone up 55% while that of Japan had gone up by 45% with the two sets of data running roughly parallel over the years. Currently, there are 69 million employed workers in Japan versus 167 million in the USA. While the US workforce has increased by nearly 40% since 1990 and especially in the last couple of years, Japan’s has remained relatively flat.

Looking at Japan from the perspective of a society that has a lower birth rate and does not want a lot of immigration you see a success story in how they have maintained a relatively healthy economy in the face of these challenges. And you see their stock market as represented by the Nikkei index up 33% from 30,000 to 40,000 over the last three years.

Japanese Business Success Stories and Potential Investments

Yahoo Finance published a list of what they consider to be the best Japanese stocks in 2024. As might be expected, Sony leads the list. The company trades on the NYSE where its shares are trading for seven times their 2012 price at $85. Sony is followed on their list by Mitsubishi and Sumitomo Financial groups, and Toyota which is trading at nearly four times its price of a dozen years ago on the NYSE at $251. Their list goes on to include Takeda Pharmaceutical, Honda, Nomura, Mizuho, Orix, and Heartcor Enterprises. All of these trade on US markets.

Why Is Japan’s Market Doing Better?

The Japanese stock boom is largely coming from foreign investment including the likes of Warren Buffett. Corporate debt in Japan is extremely low. Companies have been streamlining their management structure and thus saving money. A relatively weak yen makes their exports more competitive. And Japan is benefitting from an almost universal desire to move supply chains and investments out of China.

How Can You Invest in Japan?

The good thing about investing in major Japanese companies is that they generally trade on the New York Stock Exchange or Nasdaq. There is no need to learn Japanese, move to Japan, or become an expert in Japanese startups. For those who are not interested in picking individual Japanese stocks there are lots and lots of Japanese ETFs that trade on US markets.

Investment Risk of the Current Distribution of Wealth

If you think that your wealth is safe from confiscation by the government, you are wrong. Going back a century there were families in Great Britain who owned estates the sizes of large U.S. counties. These were “taxed away” with each passing generation so that now the survivors of these once-great families live in one wing of the old estate while the National Trust runs the rest of the buildings and grounds as a museum.  John Steinbeck once noted that even the poor in the U.S.A. view themselves as temporarily dispossessed millionaires. Thus, he did not think that the U.S. citizens would revolt or that the government would adopt confiscatory measures as in Great Britain. Now when Bernie Sanders and Elizabeth Warren talk about paying for health care and other things with increased taxes on the uber-wealthy, people are listening and supporting their campaigns. Add to this an increasingly-unpopular president soon to be impeached, and you have a potential recipe for investment disaster.

Investment Risk of the Current Distribution of Income

Trump and the Republicans crow about the lowest level of unemployment in more than half a century but fail to mention that so many of the new jobs are with low wages and none of the benefits that came with jobs a couple of generations ago. People who rent in places like San Francisco are living in the last apartment they will ever live in within that city as they are only protected by rent control from being priced out of the housing market. All of those folks with low wages who are living paycheck to paycheck can vote. And, one of these times around they are going to elect enough representatives, senators, and a president whom they believe will rectify things. When that happens, the safety of your investment portfolio could be at risk.

Investment Risk of the Current Unequal Distribution of Access to Health Care

This is another area where many people are hurting. The health care benefits that were so common in another era are gone for most people. And, at the same time, the cost of care has risen dramatically. In this case, we might expect higher taxes on the wealthy as part of the package to provide more access to health care. But, we might also see confiscatory regulations in regard to the pharmaceutical industry and health care providers.

How Do You Deal with Investment Risks for 2020 and After?

Part of your investment planning should be to decide which investment sectors will not be targeted by overly-zealous attempts to rectify perceived social injustice. Because there is not enough money in the investment portfolios of the super-rich to pay for the things that Warren and Sanders want to do, we can expect them to have to borrow. This will drive up long term interest rates but likely lead to inflation such as in the 1970s. Could this be a good time to be looking at gold as an investment again? Real estate might be a better choice.

There are already law suits against several major banks pressed by the attorney generals of all fifty states. These suits will be dwarfed by the US Federal Housing Agency if it, in fact, goes forward. There have been large numbers of bank foreclosures in the wake of the 2008 stock market meltdown and worst recession in nearly 80 years. Now more of the major banks may be at risk. There is talk already of another bailout with the US tax payer picking up the tab, again. However, this time the talk leans toward taxpayer ownership of these banks. If the situation gets bad enough banks will need to issue stock to raise capital. Doing so will drive down their stock prices. The investor interested in picking bank stocks at bargain prices will need to read the situation carefully with bank stock analysis in order to get in at the bottom of the price curve and not throw away their money on buying a stock on a bank that then goes bankrupt. Buying preferred stock might be an option in such a case as it puts one ahead of ordinary shareholders for payment if a bank goes under. Certainly how to invest in stocks of failing companies is to tread softly but there is a history in the USA of not letting the biggest companies fail. Many have earned handsome profits applying a “blood in the streets” strategy to buying failing stocks.

As always we are not suggesting that one buy bank stocks or avoid them. Bank stock analysis whether it be of Bank of America or any of the big banks currently in trouble can be instructive. The Federal Reserve chairman, Ben Bernanke, implied that the Fed would step in with further economic stimulation if the slowly recovering economy weakens. Successful bank stock analysis will take more than guessing what the Fed will do next or if their will another fiasco on Capitol Hill when in dealing with the US debt dilemma. Investment research including close reading of quarterly financial reports will give investors an idea of just how bad the situation is and when it appears on the verge of recovering. Those who time their investments just right could end up with handsome profits.

As technology moves into banking AI, there will be many changes and those who don’t keep up will loose ground.

More Resources

Will There Be a Recession Starting in 2020?

The trade dispute with China has gone from being a protracted trade war to likely being a permanent trade war. The Trump tax cut was a bust for investment and hiring. And, on top of that, the national debt is soaring even higher as the promised economic benefits of more jobs, more income, and more taxes have not come to pass! But, analysis may be wrong and, maybe, we can just close our eyes and hope for the best. Right? Wrong!

The New York Times has a good article that looks at how the recession of 2020 could happen.

The chances that the nation will fall into recession have increased sharply in the last two weeks.That is the unmistakable message that global investors in the bond market are sending. Longer-term interest rates have plunged since the end of July – a shift that historically tends to predict slower growth, interest rate cuts from the Federal Reserve, and a heightened risk that the economy slips into outright contraction.

They refer to the chances of a “self-inflicted” recession with these causes:

• Business uncertainty tied to how Trump is playing the trade war game
• Softening of business spending as the tax cut windfall is wearing off
• Central banks across the globe with limited ability to respond to a financial crisis
• Populist turning inward in many major economies

An interesting observation they make is that previous recessions have followed the collapse of incorrect and irrational beliefs:

• 2001- The internet would lead to perpetual growth with a new kind of stock market.
• 2007- The housing market would never collapse in all parts of the country at once.

To their observations we add the 1929 crash which was preceded by the belief that a brand new world of wealth was in store and that one only needed to “play the market” to become rich. (For more on this topic take a look at our article about intrinsic stock value.)

Another is the lack of leadership that led the United Kingdom into the Brexit mess.

And, we add the ambitions of the Chinese Communist Party in believing that the rest of the world would passively stand by while they targeted all of the high-tech sectors for dominance over the coming decades. Their apparent short-sightedness is based on the desire of a small group of oligarchs to maintain their authority, power, and personal wealth above all.

Lastly, we believe that Donald Trump may be an effective rabble-rouser and outright demagogue who can get votes, command the attention of the media, and perhaps even get re-elected. But, we also believe that he simply does not have the horsepower for this job. The most effective ways to maintain peace and prosperity in the post-WWII era have been with coalition building, confidence building, and maintaining the strong historical alliances that were so painstakingly built in the aftermath of the last World War. Trump’s willful destruction of our alliances may, in the end, be that which causes the most damage.

What Does Money Say about a 2020 Recession?

Pundits can write what they want but, to our way of thinking, the best evidence is in what people are doing with their money. And, that is where an inverted yield curve and decreased corporate investing and putting money into stock buybacks are the canaries in the coal mine that have stopped singing and are warning us to get out now.

How Do You Get Ready for the 2020 Recession?

With the trade war being a major issue in a coming recession, many investors will look for stocks that are not affected by problems with China or elsewhere. As interest rates go down, utility stocks go up in value as their dividends do not necessarily fall with interest rates. A while back we wrote about how to invest without losing any money. This article focused on a buy and hold strategy for Treasuries, AAA and AA bonds, ladders of CDs at your bank. This is likely what many investors are doing now as they lock in today’s rates before the Fed is forced to cut rates again to fight the 2020 recession. The last part of that formula was to look for stocks that will weather the storm, will become bargains as the market crashes, and will turn into excellent long term investments. That may be the best strategy for getting ready for the 2020 recession. If you want to look for an example of someone getting ready to buy value investments when the market falls, look at our article about the silent warning for investors in which we note that Warren Buffett is accumulating an impressive hoard of cash. Many believe that he simply does not need any stocks that meet his criteria for value and price. We believe that he is also getting ready for the next recession and market correction or crash.

What Are You Paying for a Safe Investment and Is It Really Safe?

This is a valid question in our extended bull market. Investors are paying a premium for companies with strong balance sheets and a long history of success. But, is the price you are paying going to protect you? Forbes writes that in many cases safe stocks are no longer safe.

You probably know that fast-growing stocks in exciting industries may be pricey. But boring, slow-growing stocks are often expensive, too, if they’re perceived as safe.And while you might not realize it, there’s a good chance you’re paying through the nose to keep your money safe.

Their first point is that investors pay a price for perceived investment safety. Then the problem is whether or not the price you pay is really buying safety as they look at P&G versus Amazon.com.

They make the point that the average P/E ratio in the S&P 500 is 21 while the P/E ratio for P&G is 25. A main selling point for these folks is that when the stock market crashed a decade ago P&G fell by a percent or so. The risk Forbes sees is that Amazon.com is moving into P&G’s product line by delivering dish soap, diapers, and batteries to people’s door every day. If you wonder which of your investments will Amazon.com kill next, wonder if Procter & Gamble is on the list.

A List Investments at Risk of Being Killed off by Amazon.com

Kiplinger goes beyond Forbes by looking at dozens of companies whose very existence is threatened by Amazon.com and online sales in their article, 49 Companies Amazon Could Destroy.

Amazon is willing to try its hand at almost any sort of business, does well at the bulk of them – and threatens to destroy dozens of other companies with its success.

From groceries to online pharmacy sales with a foray into video game development as well, Amazon.com tries its hand at anything and usually succeeds. If you have several safe investments in your portfolio and Amazon.com decides to move into that niche, how safe are you. Here is the beginning of the list that Kiplinger put together.

O’Reilly Automotive (ORLY), AutoZone (AZO) and Advance Auto Parts (AAP)
As delivery networks get better and inventory management technology improves, these previously safe businesses are now worried.

Kroger (KR), privately owned Albertsons and the grocery arm of Walmart (WMT)
People are getting more and more comfortable with ordering all sorts of food items and even snacks to be delivered to their home, especially with Amazon Prime and no charge for delivery.

Audiobooks.com and Playster
These folks are directly threatened by Amazon.com and their own company, Audible.

Barnes & Noble (BKS) and Joseph-Beth Booksellers
These folks are still hanging on despite worse sales figures every year. It is only a matter of time.

Beam, Dailymotion, Hitbox, Mixer, YouTube Gaming and More
This niche is about people paying to watch other people play video games. And Amazon.com has the most popular platform, Twitch. This is one more niche that they intend to own.

Best Buy
Despite an impressive turnaround, Kiplinger thinks that these folks will be driven down by Amazon.com in the end as people will opt for lower prices and home delivery.

Duracell, Energizer Holdings
This last one gets us back to the safe stock niche. These are leaders in the market and Duracell is one of Berkshire Hathaway’s holdings. Although Amazon.com does not have a well-recognized battery brand behind them, they do have pricing, delivery, and customers who are simply used to buying from Amazon.com.

Which of your safe investments will Amazon.com kill next? Take a look at the Kiplinger article for the complete list.

What Are Safe Investments in a Competitive World?

Any student of investing knows how Sears went from being the retail giant of the world to an afterthought. Likewise, we all know how digital photography virtually removed Kodak’s reason to exist. But, we have always believed that a product that people will always consume with a strong brand name will last forever. Procter & Gamble is a well-run company that fields a lot of brands and essentially wrote the book on business management. Coca Cola is known and consumed everywhere on the planet. But, in both cases, management needs to keep up with the times, effectively manage product lines and listen to what consumers are saying. A sad of example of an old company not doing that is the Kraft Heinz fiasco.

We always suggest that investors use the principle of intrinsic stock value to guide their investing. We also mention in that article that the trick to making the concept work is to learn how to anticipate future earnings. When experts like Warren Buffett throw out 95% of their evaluations as too difficult to pick, what is the average investor to do?

First of all, the average investor does not need hundreds of stocks but rather just a handful. Understanding how the company makes its money and how it will withstand threats, like Amazon.com, are basic to good analysis. And, the other rule is to pay attention as you go. With stocks like Procter & Gamble you can sleep at night but should spend a little time each year thinking about whether to add more to that stock or buy something else.

Both before the market’s October sell-off and in the two-week bounce, investors have shown a clear preference for “quality” stocks.

Not the same as cheap “value” stocks, these are companies with less debt, stable businesses and some defensive characteristics in a tougher market or economy.

A grouping of such companies by Citi surfaced the likes of Walmart, McDonald’s, Pfizer, Procter & Gamble, Amgen and Quest Diagnostics.

While not predictive in itself, this pattern is one seen in the run-up to a bear market.

So, what is a quality stock? CNBC notes this.

Quality has no single, strict definition. But the common traits are a sturdy business not reliant on a strong economy; high and resilient profitability; and a strong balance sheet unburdened by much debt.

The point is that many investors are hedging their investment risk as the bull market gets older and older, the trade war does not appear to be going away, and a House of Representatives controlled by Democrats may be a thorn in the side of the Trump administration.

Does a Quality Investment Need to Be a Stock?

An investment that is highly likely or even guaranteed to make a profit and is very unlikely to or guaranteed not to produce a loss should be considered a quality investment. When the risk of an economic downturn or market collapse rears its ugly head, you might just want to choose an investment that will not lose money no matter what happens. In our article we noted that bank deposits are protected by Federal Deposit Insurance. US Treasuries are protected by the credit of the US government. High grade corporate bonds are quite safe. And, long term investing in value (quality) stocks is a way to preserve capital during a downturn and a experience gains as the economy and market improve.

Why Is This Happening Now?

Every investment niche has a cycle. Gold, real estate, agricultural commodities, stocks and any others, all go up and then come down. A steadily growing economy, low interest rates, vibrant global trade, and stability in the social and political arenas lead to higher values in all of these investment niches. But, it would appear that many investors think that the cycle is running its course. As an example, the S&P 500 is up only 4% this year despite the Trump tax cuts, repatriation of billions in offshore cash, a twenty percent increase in earnings, and about a trillion in stock buybacks. What happens in the coming months when the Fed continues to raise rates and a trade war with China starts to damage US agriculture? Folks may not be leaving the stock market, but a lot of them are repositioning themselves with expectations of a different looking investment scene in the coming months and perhaps years.

Is This an Investment Sea Change or a Just a Bump in the Road?

If you are a passive investor and only put your money in index funds, you need only pay attention to the general health of the economy and the sector in which you are invested. But, if you are heavily invested in individual stocks, you need to understand how that company makes its money and how it will continue to do so into the future. Years ago Kodak was a secure investment. It had invented the personal camera and dominated the production of camera film and its processing for photos. Then digital came along and Kodak’s business plan did not work anymore.
Apple stock dropped a few percent just this morning. One of their suppliers, Lumentum, reported that a large customer was reducing orders. The “bump in the road” interpretation is that Apple is just adjusting for a slower part of their business cycle. The “sea change” interpretation is that there is not much more room for Apple to expand their market share and that technological innovation elsewhere in the tech world will start doing damage to their business plan.

Why Is There a Flight to Quality Investments? PPT

Shares of Tilray – the second-largest publicly traded marijuana stock – were up more than 17% Wednesday after the Canadian company posted quarterly sales nearly double a year ago.

But, is it the growth of sales that drives the stock price up, or something else?

Tilray is now valued at $4.9 billion, despite its losses, and could keep growing thanks to investments from major players in other sectors, especially alcoholic beverages. Constellation Brands – which makes Corona and Modelo, among other popular drinks – catalyzed a huge rally in Canopy Growth’s stock through the announcement of two recent investments.

“We expect more alcoholic beverage companies to announce deals with Canadian LPs over the course of the year, and view Tilray as an attractive partner for an alcohol company looking for exposure to cannabis,” Vivien Azer, an analyst at Cowen, said in a note to clients on Wednesday.

Shares of Tilray are up 164% since the company’s IPO in July.

It would appear that companies in the alcoholic beverage business do not want to be left behind if the marijuana business really takes off. Or perhaps they are just hedging their bets. Either way, it appears that at least part of the run in price of Tilray is from investment by the folks who also sell alcohol.

Long Term Value of Marijuana Stocks

What is the intrinsic value of a marijuana stock? The value of a marijuana stock will go up as its sales increase. And, sales will go up as more and more jurisdictions legalize marijuana. Where is pot legal today and where might it be legal tomorrow?

Recreational Pot in Canada

Forbes reports that marijuana is now legal in Canada.

This fall, Canada is set to become the 2nd nation in the world to allow legal consumption of recreational marijuana. The Cannabis Act, passed by the Canadian Senate on June 21, controls and regulates the growth, distribution and sale of recreational marijuana in Canada. Prime Minister Justin Trudeau expects everything to be in place for consumption to begin on October 17.

The population of Canada is 36 million people, just a couple of million fewer than live in California.

Recreational Pot in the USA

Business Insider has a map showing where marijuana is legal for medical use and where marijuana is legal for recreational use in the USA.

Nine states and Washington, DC, have legalized marijuana for recreational use – no doctor’s letter required – for adults over the age of 21.

Legal marijuana sales exploded to $9.7 billion in North America in 2017, according to a report from Arcview Market Research and BDS Analytics. That represents a 33% increase over 2016, shattering previous expectations about how quickly the marijuana industry could grow in the face of federal prohibition.

The report also predicted the legal marijuana market will reach $24.5 billion in sales – a 28% annual compound growth rate – by 2021, as more state-legal markets come online.

It would appear that recreational marijuana is a growth industry, which explains why the folks who sell alcohol are buying a few shares of the competition just in case.
States where pot is legal for recreational use:

• Alaska
• California
• Colorado
• Maine
• Massachusetts
• Nevada
• Oregon
• Vermont
• Washington
• District of Colombia

Federal Law versus State Law

Federal law prohibits marijuana use for recreational purposes. But, in states where pot is legal, local law enforcement agencies do not arrest anyone and Federal Authorities have followed state procedures in these jurisdictions. As such it would appear that more and more states will legalize marijuana and increase the available market for marijuana companies.

In the end, the marijuana companies that will be good investments will be those which manage their cost of production, compete well on quality and price, and market most effectively. Right now, it is not clear who that will be!

Are Marijuana Companies Good Investments? PPT

Direct Foreign Investment in Canada Is Up

The Canadians for Tax Fairness website reports that direct foreign investment in Canada is up, while direct foreign investment in the USA is down. They look at this in regard to the Trump tax cuts which have not been sufficient to bring foreign capital into the USA.

“There was speculation that this would result in a flow of money from Canada to the US and anecdotes of businesses relocating have been popping up in the news,” says Diana Gibson, a researcher with Canadians for Tax Fairness, “however, recent Statistics Canada data shows that the outflow has not happened.”

According to Statistics Canada data, Canadian direct investment in the US in the first quarter of 2018 was less than half of the long-term average at $4.1 billion, while direct investment from the US to Canada was higher than the long-term average, at $7.9 billion. Not only were flows into Canada higher than average, and flows to the US lower than average, but net investment actually flowed north.

The tax fairness folks use this data to argue that Canada does not need lower corporate taxes. Our take on the situation is that the USA is on the way to walling itself off from the rest of the world. And even investors in the USA are smart enough to see that today’s foreign investment opportunities are in places like Canada.

The folks who produce yearly foreign direct investment statistics are the OECD. They note that foreign direct investment is generally down across the globe.

Global FDI flows reached their lowest level since 2013 (USD 280 billion) in the fourth quarter of 2017. Inflows to the OECD area decreased by 37%, largely driven by decreases in the United Kingdom and the United States from high levels in 2016. Outflows from the OECD area decreased by a more modest 4%.

US News lists the countries that receive the most foreign direct investment and we believe are today’s foreign investment opportunities. The USA stills ranks number one but the figures were gathered before a trade war loomed. Next on the list are the UK, China, the Netherlands, Ireland, Brazil, and Singapore. Rounding out the list are Germany, India, and France.

If you are looking for investment opportunities outside of the USA, take a look at our article on risky offshore investments and then take a look at the US News article for ideas about better nations into which you might put your money offshore.

What Are Today’s Foreign Investment Opportunities? PPT