Another article on Investing in the USA you say? I know you may be feeling anxious or depressed about the state of affairs. It is the “Raging 20’s” after all. Strikes, shutdowns, inflation, overall crummy news, there is so much to feel awful about.
Let the Money Vikings cheer you up a bit and push through the fog of despair.
Never bet against the US – Keep Investing in the USA!
“I have yet to see a time when it made sense to make a long-term bet against America. And I doubt very much that any reader of this letter will have a different experience in the future,” Buffett wrote in his shareholder letter. “We count on the American Tailwind and, though it has been becalmed from time to time, its propelling force has always returned.”
Buffett is right, and this is not just based on a belief or faith, this is reality. And I will explain some of the reasons why.
Studied, traveled and reflected
Before you trust what I say about the greatness of American, let me tell you a quick version of my background. In college I studied international relations and policy. I then spent many years traveling to other countries and at times living in those countries where I gained a deeper understanding of other systems. And in the last few years I have done extensive research in demographics and other related issues to gain of sense of macro trends.
5 reasons to keep Investing in the USA
For some reason I really like boiling things down to 5 reasons or sections. So here goes, 5 reasons to continue to invest primarily in the US.
The United States is one of the most attractive investment destinations in the world. It has a large and growing economy, a stable political system, and a deep and liquid capital market. Here are five reasons why the USA is a great place to invest:
- Large and growing economy: The United States has the largest economy in the world, with a GDP of over $25 trillion. The economy is also growing at a steady pace, with an average annual growth rate of over 2% in the past decade. This economic growth creates opportunities for businesses and investors alike.
- Stable political system: Yes, even with the recent turbulence, we still have one of the more stable political systems. We will see if that remains the same. The United States has a stable political system with a long history of democracy. This stability provides investors with confidence that their investments will be protected.
- Deep and liquid capital market: The United States has the deepest and most liquid capital market in the world. This means that investors can easily buy and sell securities, and they can get a fair price for their investments.
- Diversified economy: The United States has a diversified economy with a wide range of industries. This diversification reduces the overall risk for investors.
- Strong innovation culture: The United States has a strong culture of innovation. This is evident in the high number of startups and new businesses that are launched in the US each year. This innovation creates new opportunities for investors.
Here are some specific examples of opportunities to consider while I will keep investing in the USA:
- Demographics & Geography: Never underestimate the power of demographics and geography in determining the future fortunes of a nation. The US has a defensible nation, rich natural resources and somewhat favorable demographics. Some countries have a population that is either way too old with few kids. The US seems to have the sweet spot at the moment.
- Stocks: The US stock market is the largest and most liquid stock market in the world. Investors can invest in stocks of companies of all sizes, from small caps to large caps.
- Bonds: The US government and corporations issue a wide range of bonds. Investors can invest in bonds to earn a fixed income stream.
- Real estate: The US real estate market is one of the largest and most stable real estate markets in the world. Investors can invest in residential and commercial real estate.
- Private equity: Private equity firms invest in private companies. Investors can invest in private equity funds to gain access to this asset class.
Overall, the USA is a great place to invest because of its large and growing economy, stable political system, deep and liquid capital market, diversified economy, and strong innovation culture. Investors have a wide range of investment opportunities to choose from in the USA.
One last comment. One of my best investment vehicles has been Berkshire Hathaway stock and I see that continuing. It is essentially a conglomeration of diversified and powerful US companies.