{"id":37500,"date":"2013-04-11T23:03:57","date_gmt":"2013-04-12T03:03:57","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=37500"},"modified":"2013-04-11T23:03:57","modified_gmt":"2013-04-12T03:03:57","slug":"australia-the-home-of-world-beating-divdend-stocks","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/04\/11\/australia-the-home-of-world-beating-divdend-stocks\/","title":{"rendered":"Australia: The Home of World Beating Divdend Stocks"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a> <\/p>\n

Watching the markets is more like a geography lesson these days.<\/p>\n

Last week it was Cyprus. This week it’s Japan.<\/p>\n

What’s next? If the press is right, it’s Luxembourg.<\/p>\n

Apparently the country’s financial system is too big relative to the size of the economy.<\/p>\n

What should you do to prepare for the coming ‘Luxembourg-ageddon’?<\/p>\n

We’re surprised you asked. Do what we are. Buy stocks<\/a> before this rally really<\/em> takes off…<\/p>\n

If you wonder how we can back stocks<\/strong> with the world in never-ending turmoil, give us a moment to explain.<\/p>\n

On Wednesday we went to the Bloomberg Australia Economic Summit in Sydney. Keynote speakers were Treasurer Wayne Swan, Shadow Treasurer Joe Hockey, and New South Wales Premier Barry O’Farrell.<\/p>\n

Other speakers included Coca-Cola Amatil CEO Terry Davis, former Reserve Bank of Australia<\/a> board member Warwick McKibbin, and housing bear Professor Steve Keen.<\/p>\n

The big message I took away was that for all the talk about letting ‘free markets’ work, the reality is they’ve got no intention of letting that happen.<\/p>\n

Every time someone said they believed in free markets<\/a>, they quickly followed it with a ‘but’.<\/p>\n

That tells us there’s not a chance in heck of an end to the meddling and money printing.<\/p>\n

More Proof Money Printing Boosts Stocks<\/h2>\n<\/p>\n

And while speakers at the Bloomberg summit didn’t commit Australia down the same path, they certainly didn’t object to it going on elsewhere.<\/p>\n

In short, if the Australian economy<\/a> doesn’t get into shape soon, the money printing you’ve seen overseas will happen here.<\/p>\n

But even if it doesn’t, the international flow of new money has already hit the Australian share market<\/a>. That will only increase as foreign central banks <\/a>churn out more printed money.<\/p>\n

And if you believe that money printing is only good for gold<\/a>, not stocks, think again. The next chart proves a point we’ve made for some time:<\/p>\n


\nSource: Business Insider<\/em><\/strong><\/strong><\/div>\n

This chart only goes until the end of 2012. It doesn’t include the recent reaction to Japan’s money printing plans<\/a>.<\/p>\n

This has helped spur the US S&P 500 to an all-time record high:<\/p>\n

\"\"<\/a>
\nSource: Google Finance<\/strong><\/em><\/a><\/div>\n<\/p>\n

It has even helped push the Australian stock market back above 5,000 points after more than a month of painful falls.<\/p>\n

But even so, for most stocks<\/a> the falls weren’t that bad. The benchmark index only fell 4.9% from the early March peak to the early April trough. That’s hardly what you’d call ‘crash’ territory.<\/p>\n

As we said all along, it was and still is the time to buy stocks<\/a>. We’ll show you another chart that explains our point further…<\/p>\n

Still Something Left for Yield Hunters <\/h2>\n<\/p>\n

The Reserve Bank of Australia recently released its latest chart pack showing key data on the Aussie and world stock markets<\/a>. The chart that interested us the most was this one:<\/p>\n


Source: Reserve Bank of Australia<\/em><\/strong><\/div>\n

The chart shows you the dividend yield for Aussie stocks compared to world stocks. As you can see, despite the recent Aussie stock rally, dividend yields<\/strong> are still much higher than non-Australian stock dividend yields.<\/p>\n

Foreign investors can get nearly twice as good a yield in Australian dividend stocks<\/strong> as they can in stocks anywhere else.<\/p>\n

This is a key point for big institutional investors. It won’t mean that they’ll invest<\/a> every cent in Australia, but they will invest more than they have in the past.<\/p>\n

The relatively stable Australian dollar<\/a> helps the case for Aussie stocks. Since late 2010, the Aussie dollar has traded in a fairly tight range. The range has consolidated further since mid-2012.<\/p>\n

Seeing as currency movements<\/a> can have a big impact on stock returns, it’s important for foreign investors to know they’re dealing with a stable currency.<\/p>\n

Don’t Miss the Money ‘Torrent’<\/h2>\n<\/p>\n

But make no mistake, this stability won’t last forever. As long as central banks hold interest rates at record lows, and print money at a non-stop rate, investors here and overseas should take advantage of market dips in order to buy good dividend stocks<\/a>.<\/p>\n

You could wait and hope stocks will fall so you can bag an even bigger yield. But that’s a big risk. You risk missing out on a decent yield and capital growth if the central bank money ‘torrent’ pushes stocks higher<\/a>.<\/p>\n

You shouldn’t bet your house on the market (it’s still risky), but you could miss out on the best stock rally<\/a>  in years if you stay on the sidelines.<\/p>\n

Cheers,
\nKris<\/a><\/strong>
\nJoin me on Google+<\/u><\/strong><\/a><\/p>\n

From the Port Phillip Publishing Library<\/em><\/strong><\/p>\n

Special Report: TORRENT SIGNAL 3 <\/a><\/p>\n

Daily Reckoning:<\/em> The Market Is High<\/a> <\/strong><\/p>\n

Money Morning<\/em>: <\/strong>Investors: Ignore Japan’s Yen Devaluation Game<\/a> <\/strong><\/p>\n

Pursuit of Happiness:<\/em> Why the NBN is Dead Before it’s Begun<\/a> <\/p>\n

Australian Small-Cap Investigator<\/em>:
\nHow to Make Money From Small-Cap Stocks<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Watching the markets is more like a geography lesson these days. Last week it was Cyprus. This week it’s Japan. What’s next? If the press is right, it’s Luxembourg. Apparently the country’s financial system is too big relative to the size of the economy. What should you do to prepare for the coming … <\/p>\n

Continue reading “Australia: The Home of World Beating Divdend Stocks”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-37500","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/37500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=37500"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/37500\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=37500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=37500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=37500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}