Why investors should look overseas for growth

Australia has been the lucky country for a very long time. Indeed, it has broken the world record for economic GDP growth – this is defined as two consecutive quarters of contraction – and Australia is adding to this record every three months. Things might look a bit different if you were to analyse GDP per person.

Australia’s individuals, businesses and governments have greatly benefited from this economic run, but it could be time to look elsewhere for growth. In the past a lot of the growth in Australia was funded by underlying earnings growth, whereas in the last few years it mostly seems to have been driven by growing household and government debt levels. That can’t go on forever.

We are lucky in Australia that we have so many growing industries, for a country with only around 25 million people. However, a lot of our top companies have now reached a saturation point. Companies like Wesfarmers Ltd (ASX: WES), Telstra Corporation Ltd (ASX: TLS) and Woolworths Group Ltd (ASX: WOW) are as nationwide as they can go, they can only really grow with population growth, taking market share or new businesses from here.

That’s why I think it’s important we look overseas for growth. The global population offers a much bigger opportunity than the 25 million people here. Going global could mean buying shares of businesses expanding overseas like Ramsay Health Care Limited (ASX: RHC), REA Group Limited (ASX: REA) and Altium Limited (ASX: ALU), at the right price.

It could mean buying shares of listed investment companies or trusts that invest in shares overseas for you like Magellan Global Trust (ASX: MGG) and Templeton Growth Fund Ltd (ASX: TGG).

Another way would be to invest in low-cost overseas-focused exchange-traded funds (ETFs) like the Vanguard MSCI Index International Shares ETF (ASX: VGS) or the Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU).

Of course, you could also invest directly in shares that have excellent growth futures like Facebook and Alphabet (Google).

Foolish takeaway

However you do it, I think it’s important you find shares that are growing beyond Australia’s shores. Perhaps Australia will continue to grow strongly, but it would probably be wise to diversify your geographical risk and invest in shares with an international outlook.

One ASX share that’s starting to expand into the fast-growing Asian region is this exciting stock.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of Altium, MAGLOBTRST UNITS, and Ramsay Health Care Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Wesfarmers Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Ramsay Health Care Limited, REA Group Limited, and Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now