Are British investors missing a trick by shunning Wall St
Nine of the world's biggest brands are American. Are we missing out, asks Paul Farrow
by Paul Farrow, Personal Finance Editor
Saturday 9 October, 2010
Talk of investing in the US evokes images of Gordon Gekko, the king of Wall Street, all braces and pinstripes, making multi-million-dollar deals and living the high life. Yet the Eighties blockbuster film did little to encourage British investors to grab a slice of the American investment pie.
More than two decades on and Michael Douglas has reprised his role as Gekko in the sequel Wall Street: Money Never Sleeps. Yet, Wall Street might as well take 40 winks where British investors are concerned, as they continue to shun the world's biggest stock market - it was the least popular sector according to the latest monthly statistics from the Investment Management Association.
It perhaps seems strange that British investors don't invest in American shares. After all, nine of the world's biggest brands are American - they are names we know and we contribute to their prominence. Take an IBM laptop into McDonald's, sip a Coca-Cola, check your email on Microsoft Outlook and surf on Google, and you will have embraced five of the top six in one swoop.
Yet despite its familiarity, financial advisers have never been too keen on selling the US story to investors. ......
......Not that all financial advisers are downbeat.
Alan Steel at Alan Steel Asset Management is baffled as to why British investors shun the US. But he suggests that it is difficult to ignore a nation whose GDP is equal in size to the GDP of France, the UK, Italy, Brazil, Canada, Spain, Russia and India added together.
"The US market has always gone up strongly following the first two years of a new president's first term, going back to the Thirties, and we are about to enter the sweet spot," Mr Steel said.
"On top of that, demand has come in the past from times when a new generation is significantly bigger than the previous one. Generation Y, as it is known, is reckoned to be 20pc bigger than the baby boomers. No other country has this phenomenon as far as I can see." ......
Quote courtesy of The Telegraph
Saturday 9 October 2010