Despite weakness in Asia Pacific markets there is promise of recovery. Learn how to buy Asian stocks and other Asian Pacific investments while they are at bargain basement prices. China’s economy is slowing. Japan keeps flirting with recession and is devaluing its currency in order to make its products more competitive. Australia is hurting because China has cut raw material orders. If you subscribe to the blood in the street theory of investing when markets are weak this may be a good timeto look at stocks in the Asia Pacific. Specifically if the Trans Pacific Partnership agreement ends up being ratified that will engender increased trade and profits throughout the region.
Trans Pacific Partnership
A couple of years ago we looked at how to invest in the Trans Pacific Partnership.
Likely members of the Trans-Pacific Trade Partnership are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam. Nations that have expressed interest in the Trans-Pacific Trade Partnership are Taiwan, Philippines, Laos, Colombia, Indonesia, Cambodia, Bangladesh, India, South Korea and Thailand.
All of these nations will likely see trade increases if this huge free trade zone comes to be. The Obama administration is promoting this agreement and Hillary Clinton has previously supported it. Assuming that Trump does not end up in the oval office there will be an American president who is likely to push for ratification of this agreement. And if the possible Democratic landslide happens because of the Trumpocolypse Clinton will have a majority of Democrats in the US senate. When you look at how to buy Asian stocks remember the other nations that will be part of the TPP trade deal.
How to buy Asian stocks for most investors will be with American Depositary Receipts as we noted in our article about Offshore Investment Advice.
When the economy is not doing well at home investors are often tempted to look offshore. When this is as simple is buying stocks of foreign companies via American Depository Receipts (ADRs) the approach and tax consequences are pretty much the same as when investing in American stocks.
There are currently 292 Japanese stocks that trade as ADRs in the USA. Australia has 230 stocks that trade as ADRs. And Singapore has 78. Take a look at Topforeignstocks.com for lists of foreign stocks for which you can buy ADRs in US markets.
“Home Sweet Home” -That may be the mantra some US investors may be tempted to follow now and avoid investing in foreign stocks. However following that strategy is not a wise move for many reasons.
Not all foreign stocks are good investments. When deciding how to buy Asian stocks and other stocks in the Asia Pacific region look for the same measures of intrinsic stock value that you look for in American stocks. Additionally look at current and anticipated exchange rates. Companies in the Asia Pacific whose businesses rely on domestic demand will perform that same whether their currency is strong or weak. But if you invest when the currency is weak your profits will soar when the currency recovers.