Goldman predicts, tariff’s notwithstanding below GDP growth. Lot could change. If you are looking to diversify beyond US, I will look at China and India.
China is experimenting with liquidity injection, but in Chinese style. They are trying to support local government, and some of their off balance sheet debt, provide liquidity to companies to buyback(!) directly boosting share price. For an average US investor who is familiar with FED injecting liquidity, kool-aid drinking… these are not easy to understand or figure out where it will boost the economy. Also, China is doing this on piecemeal basis. So after the initial euphoria the stocks have declined, for ex: $FXI going to $37.5 from $26 is now back to $30. I am planning to buy the dip to have 3% allocation to China via mostly ETF’s outside of BABA position.
India on the other hand, unlike China’s equities had a good 2 years.
In fact, Indian equities have almost in lock step with US, until the government clamped down on derivatives/ Index trading.
So as India introduced weekly options, same day settling, etc, retail investors went crazy and most are not having sufficient capital or experience or trying to get rich overnight. A study showing 90% of retail investors have lost money in these contracts… There are unconfirmed reports that some big US hedge funds, have cleaned up the retail investors. SEBI (Indian SEC) has clamped down and restricted the # of contracts available for trade, etc, minimum contract size, higher margin, etc. While they are not eliminating Futures or Options trading, but essentially making it difficult for many small investors to trade. This coincided (!) with portfolio withdrawn from foreign institutional investors.
These are market related issues, not economic issues. If anything, economy is doing good, inflation is relatively stable, Central government is continuing to invest heavily in infrastructure projects, (trickle down economics), etc.
I closed all my $INDA position when I learned around $57, not exactly at the top. But still a smart move
I am waiting to see how far this drawdown goes and will initiate again.
Separately, Buffett is big on Japan. I had some success in trading the country ETF, but recently I haven’t touched it.