Edge of America in the Global Investment Policy

Unlike most investment advisers and strategists, I pay a lot of attention to politics, both here in America and overseas markets. The policy of a country tells me much about the likelihood of long-term growth and economic stability - essential elements for successful investing. It also reveals the culture of a country, the business climate and life in the wake of shocks as the housing crisis. Countries with free and open political systems can take shots and sledgehammer to fight back.

And while we do not know if the Dow is up or down tomorrow, we know that shortly after midnight, the citizens of Dixville Notch, will, as usual, be the first American citizens to vote in presidential primaries in New Hampshire.

The presidential campaign is actually my blood pumping. The race between Senator Clinton and Senator Obama was upset with John Edwards for opening maneuvers. The Republican race is more fluid and open with the sudden rise of the former Governor Huckabee is a threat to the former Governor Romney, former New York Mayor Rudy Giuliani losing steam in national polls and re-direct his efforts for large States like California and Florida. All this movement is to create an opening for the old lion, Sen. John McCain, whose campaign was left for dead just a few months ago and staged a comeback in New Hampshire.

For a political junkie like me, there's nothing better than this.

Chinese leaders like to describe American democracy as a "moneybags democracy", but noted that the ongoing race issues, personality and strategy can often get the better money. Mr. Huckabee won in Iowa, despite being outspent 20-1, the upstart Obama has tied Clinton money machine dollar for dollar by collecting small donations and Mr. McCain is back in action despite its budget bus.

Equally important, the candidates also far behind in the polls can raise money with a platform of belief. Texas Libertarian Ron Paul recently broke the record for fundraising, one day, raking in over $ 5 million through a campaign on the Internet.

Then there is the relatively civil behavior in our countryside and the fair, the regular transfer of executive power. Of course politics is a contact sport anywhere, but we're looking pretty good compared to the punch last month in South Korea, the chaotic situation in Pakistan, and the ham-handed turnover of power in Putin's Russia well - Mr. Putin .

Pakistan is the clearest example of political turmoil and one wonders how the events unfold could have an impact on the market in neighboring India's booming stock as represented by ETF (IFN). Neighbor India is closely monitoring events in Pakistan for the security challenges that may come up. Keep in mind that there are more Muslims living in India than in Pakistan and that both countries possess nuclear weapons. Since the creation of Pakistan in 1947, the two countries have fought three major wars. The first two came from the conflict over Jammu and Kashmir, the northernmost state of India, which shares a border with Pakistan. The accession of Jammu and Kashmir to India in 1947 has long been disputed by Pakistan.

2008 also brings some important election that will undoubtedly influence markets. In Thailand, the People Power Party, allies of ousted Prime Minister Thaksin Shinawatra, has emerged as the largest party after the elections Christmas Eve, but fell a little less than a majority in the formation of any government in 2008, remains poorly clear. It 's difficult to have confidence in the Thai market (TF) without some confidence that the government is in place, although it is interesting from the point of view of assessment.

Japan, Prime Minister, Mr. Fukuda, not even three months of work, suffers from the same lack of confidence and popularity sank his predecessor, Mr. Abe. This has contributed to the worst performance index of Asia-Japan (EWJ) last year. It 's no coincidence that the bull market has coincided with Japan's former Prime Minister Koizumi has a strong economic agenda, and foreign affairs?

The presidential elections are scheduled for the place in Taiwan in March and will have significant implications for relations with China. It could very well open more economic channels between the two countries and serve as a catalyst for Taiwan recently lackluster ETF (EWT). South Korea faces parliamentary elections in April, the results of which will be critical to shoring up support for market reforms planned by President-elect Lee Myung-bak.

This highlights one of the most difficult aspects of a functioning democracy - the concept of a loyal opposition. Many cultures have great difficulty grasping and practice that can oppose the policies of the government and try to change them, while being patriotic and loyal to your country. The phrase "where opinions clash, freedom rings" is alien and unwelcome in many countries around the world.

Our two-party system, while harshly criticized by many, is also very important. Coalition governments tend to be a bit 'heavy and unstable. Just look at the situation in India, where some relatively small Communist Party faction in the coalition government market reforms of major economic blocs.

And the great bull markets usually start to build bikes with significant market economic reforms. U.S. economic growth can still be traced back to President Reagan cut the tax on the supply side, the center of his platform 1980. The Irish economy was a mess with middle-income earners to tax more than 60% of their wages and debt out of control.

Then Charlie Haughey became prime minister. Taxes and spending were cut sharply and companies such as Apple, Microsoft and Dell have been lured across the Atlantic through a series of incentives including low corporate tax rates. The Irish market was off and running, but unfortunately, the dramatic impact of these reforms has faded with time and with it the prospects for the Irish funds such as New Ireland Fund (IRL).

Similarly, the reforms implemented by former Australian Prime Minister Bob Hawke in 1980 laid the foundation for a remarkable run of prosperity, and reinforced by John Howard, has helped make the Australian market (EWA), the darling of global investors. The same held for the election of Prime Minister Margaret Thatcher and the next shot the British economy.

The reason for all these programs have been successfully implemented and sustained is because the first has gained support through the political process. It may take a little 'more than many would like, but the reforms have vetted through the democratic process is a durable and gain legitimacy. In the end, voters demand change and reward.

An interesting and important trend in world politics is that support for globalization is now stronger in emerging countries than here in America. This is a sharp reversal of just a decade ago, when politicians emerging foreign multinationals used as scapegoats.

A recent poll by the Wall Street Journal and NBC found that 58 percent of Americans think globalization has been bad for the United States and that only 28 percent believed that it was good. Ten years ago, the separation was more even: 48 percent thought that globalization was good and 42 percent that is bad. The biggest surprise is that the supporters of the two parties are further apart on the issue. The globalization has been bad for the United States by 55 percent of Republicans and 63 percent Democrats. This feeling can be turned into an open and honest policy debate on economic policies that allow U.S. companies to generate new jobs and profits, gaining market share in fast growing emerging markets.

Politics in democracies like America also reflect its entrepreneurial business culture. In most cases, candidates for public office today are self-selected, not chosen by the party machine. Candidates for public office in America are just like our 25 million small business owners who have struck out on their own, with little more than a hope and a prayer and somehow managed to endure and prosper.

But I do not want to say that politics is only important for its impact on businesses. Rather go to a country's fundamental values ​​and to the heart of the quality of life. What good is all the money in the world, if citizens have no freedom of expression, freedom of religion, due process and the right to choose their rulers those? No, thank you.

Then there's the ultimate test. If people around the world want to come live in your country. No matter what you think about securing our border with Mexico, it is important to remember that people want to come to America, while in some countries, the walls have kept people who want to quit.

So, even in the face of a temporary economic slowdown, banking problems, global competition and turbulent markets, keep in mind that American policy is a major competitive force. Without a free, open and robust political process, all the economic growth only get so far until it hits a huge speed bump derail.

So do not forget to consider the policy during the creation of the global portfolio ....