 Good day fellow investors. Great to have you here and today we'll discuss a foreign investment that's not an emerging market but it's a developed country but has most of the benefits that foreign investments bring. Today I'll discuss Australia. So whether it's space to invest down under now and what are the risks and rewards? We'll look at the demographics, the microeconomic situation, the currency situation, the fundamentals of the stock market, how to invest in Australia and discuss a little bit about taxes because it's very important to see how will you be taxed on Australian dividends. So let me immediately start with the Australian population. Europe is not growing so I want to invest in countries that have a positive demographic trend. The Australian Bureau of Statistics made a forecast with the best case scenario, the worst case scenario and the probable case scenario and you can see that the population in Australia is projected to double by 2075 which implies a growth rate of 1%. Now demographics are very important for an investor especially long-term investors because you want to be exposed to positive trends. A population increase of just 1% per year over 10-20 years increases the GDP by at least 20% and that's very important. If you have a stagnating or declining population it's automatically with lower GDP, lower sales, lower earnings, lower everything in the country and lower the value of its currency. Therefore those who invest for the long term in some European countries have to be very very careful but we'll discuss more about that in special videos. After demographics it's good to take a look at the macroeconomics, economic growth projections and the economic growth projections for Australia are pretty positive and you can see how the economy is expected to grow by more than 3% in the next 15 years. If this is much better than what other developed countries offer with their 1.5-2% for the long term the Fed expects the US to grow at 2%. What's important to note is that Australia didn't see a recession for the past 25 years which is something very very remarkable. So we have a positive economic trend, good economic prospects and a stable developed country. So how can an investor make money on that? Well of course the main potential comes from currencies and we have to check how is the Australian currency fairing in this environment. As you can see here the US dollar against the Australian dollar in 2008 the Australian dollar was strong then before the financial crisis dropped significantly then it recovered in 2011 and now it's still pretty much on historical looks. As Australia is one of the strongest commodity exporters in the world it's very interesting to see how its currency is correlated to the commodity index. By comparing the previous currency chart with the commodity price indexes we can see how the currency strength is really related to commodities especially metals and energy. Spike 2008, decline 2009, recover 2011-12 and then dropped again and then you can see a small recovery now and expected to continue. Just a reminder here Australian exports are mostly focused on iron ore, coal, oil products, gold and other mining and agricultural products. So I see India developing at 8-9% per year, China continuing to grow at 7% per year that will increase demand for iron ore, coal and we're best to source that then from the nearby Australia. On top of the potential reversal in commodities that will affect the Australian currency something that can also impact the currency positively is the interest rate. The interest rate in Australia is at historical lows. In order to prevent a recession the Reserve Bank of Australia has lowered interest rates to historical lows now we are at 1.5%. However you can lower interest rates as long as the inflation rate is low and we can see how the inflation rate has been picking up recently. This will force the Reserve Bank of Australia to increase interest rates, higher interest rates, more demand for the Australian currency and Australian bonds because global currency fund flows go for there where the higher yield is. So we have several factors to be bullish on the Australian currency. Positive economics 3% growth, low interest rates that have to revert in order to cover for inflation and the potential rebound in commodities coming from India and China. Now how to invest? You can invest in an ETF, you can invest in a currency ETF and you can invest in single stocks. Let me start with the dividends. As you can see in this table the dividend yields in Australia are pretty high and here we have all companies that are here we have all companies that have market capitalization higher than 1 billion and you can see how many of them have dividend yields above 5% and even 6%. So if you're a stock picker dig into Australian stocks and I'm sure you can find some good companies that will have individual stock fundamentals that will lead to future gains on top of potential currency gains. An important note here the Australian dividend withholding tax is from 0 to 30% and depends really on your personal income so you have to see check with your broker with your financial advisor how are you taxed on Australian dividends. However even if you're taxed at the maximum 30% a dividend yield of 6% becomes 4% which is still better than the 2% the SAP 500 offers plus the currency benefit. If you want more diversification there is always the iShares Australian ETF that gives exposure to a broad basket of stocks and has a dividend yield of 4.77%. However the ETF as you can see is heavily exposed to financials which can be good or can be bad in this case probably with higher interest rates and stronger currency it is not that bad. I like to look at ETFs because they show me how the whole market performed and the Australian market has done pretty well in the last year and a half but has still plenty of room to grow in order to reach the levels at where it has been in the past. Now I wouldn't invest in Australian bonds because the yield are pretty low the five-year yield is 2.26% the 15-year yield is 3% so if interest rates increase the yield goes higher the bonds lose in value so it's a little bit too much risk for a small yield. For those who are only interested in the currency play there is always the currency Guggenheim ETF. So to conclude I really think that a well-balanced international portfolio should be exposed to Australia at this moment in time. There is no point in buying something when everything is good because then the downside is larger than the upside. When things are not that good as they seem now in Australia but the long-term future trends are positive now it's time to get exposure there. Later on everything is good when there will be no worries about Australia when there will be high demand for commodities it will be too late. 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