Most of the world’s markets are currently in a bull cycle and investing in international exchange traded funds (ETFs) has been paying off. Sam Patel for TheStreet.com looks at some of the underlying issues to help gauge whether this trend will continue, even if the U.S. economy slows down.
He finds the international markets look set to continue their gains by looking at carry trades; when investors borrow from countries with low interest rates and lend to countries with higher interest rates. In the past, the U.S. dollar was the favored currency for investment. But if the U.S. economy slows, it does not mean carry trades will cease to exist. It just means money will come out of the U.S. markets and will be redirected to another country for higher yields.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.