Bill Gross says Buy Australia

If you’ve already read Bill Gross’s August missive you’ll know I’ve taken a liberty with the title, but please stick with me. Here is what he actually said

There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields, as well as selectively chosen emerging market commitments where nominal GDP growth prospects are tilted upward as opposed to gravitating to new lower norms.

While Mr Gross didn’t actually say buy Australia can you name a country which better fits Bill’s bill?

Consider the S&P ASX 20 (top 20 companies in Australia) where the average yield is 5% and the highest is 9.6% and the balance sheets are strong.

Australia’s GDP growth prospects are tilted upward as it continues to supply the raw materials for the growing number of global consumers.
Global consumers

Roger Nausbaum continues to talk about doubling his Australian allocation to 6%. For a guy who invests internationally I’m surprised that he doesn’t use Interactive Brokers and restricts himself to ADRs and OTC. Though as he is managing other people’s money I am sure he has good reasons.

I continue to up our Australian allocation as I pull back from my favoured investing destination of the US. Regularly taking your Australian potion should help with some of the common side side effects of a devaluing greenback and inflation.

Want to read more of my investing in Australia cheer leading? Keep in mind I am talking long term and I am not nearly as optimistic in the short term.

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