How to Invest in International Funds 11/16/13

This morning I read the news that Sachin Tendulkar retired from cricket after 200 Test matches and a sterling career where he has proved himself to be one of the great batsmen of all time. Sachin is a hero in India. But for the internet I would have missed the announcement as cricket is hardly played here in the US. Even in this global environment that we live in, how myopic we can be. It made me think more International. Which countries are doing well in the stock market? The old stars were the BRIC countries; Brazil, China, India. The new stars are who? The answer may surprise you.

Looking at ETFs (Exchange Traded Funds) we can invest in the major stocks of another country by just buying that country’s ETF. For example

EWA   Australia                                               EWP    Spain

EWC   Canada                                                 EWL    Switzerland

EWD   Sweden                                                EWN   Netherland

EWG   Germany                                              EWQ   France                         

EWI     Italy                                                      EWT    Taiwan

EWJ     Japan                                                   EWU   United kingdom

EWK   Belgium                                                EWZ    Brazil

FXI      China Large Cap

IIF       India Fund

With the momentum analysis technique that I use monthly on my 401K, the best selection would be:

EWP Spain, EWI Italy, EWG Germany and IIF India. See charts below.

Italy has issues with debt, Spain with high unemployment and yet here they are rising faster than other countries. Germany’s inclusion seems expected given that Germany seems to be carrying Europe economically, ever since the Euro was introduced. Prior to the Euro, businesses were exiting Germany because of the high wages and high cost of manufacturing. India was included as it had the fastest mid-range momentum change upwards but the chart certainly has a different pattern.

Technical analysis of charts by itself does not show which funds are rising fastest. A comparative momentum analysis does a much better job of revealing that. A combination of the two can be very helpful to determine direction and then to find an entry and exit point.