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.
