THE GROWING MIDDLE CLASS OUTSIDE THE U.S.

We believe that the world is becoming a smaller place. Investments, especially in large companies are rarely domestic only. Therefore, it is only logical that investments include international. It is my belief that global investing will continue to increase as time goes on. We will hear less frequently, “is this a US company?”

According to a paper by Homi Kharas and Geoffrey Gertz of the Wolfensohn Center for Development at the Brookings Institute global demand by consumers is shifting from the West to the East. Previously, global growth was dependent on the US consumer. Now, the growing middle class in Asia can create the demand spurring global growth.

Their data suggests that

“…by 2015, for the first time in 300 years, the number of Asian middle class consumers will equal the number in Europe and North America. By 2021, on present trends, there could be more than 2 billion Asians in middle class households. In China alone, there could be over 670 million middle class consumers, compared with only perhaps 150 million today.”

So companies, regardless of where they are domiciled, are going to want to sell their products to the new growing middle class. Having a global portfolio allows you to participate in this opportunity (that can still mean declines as well as advances; remember past performance is not a guarantee of future success).

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