I think that you should focus on ASX shares with overseas growth potential.
Australia is a great country. It hasn't had a recession for more than 25 years – a fantastic record.
Many of Australia's domestic-focused businesses have done exceptionally well during this time such as Commonwealth Bank of Australia (ASX: CBA) and Wesfarmers Ltd (ASX: WES).
However, I believe the key to generating good investment returns in the coming years is focusing on ASX shares that are growing overseas.
Australia is large continent, but it has a small population. It doesn't take long for a business to reach most of Australia's population. After that, the growth is limited to price increases and population growth. It will be limited by the 25 million people addressable market.
It's also a good idea to expand to other countries because sometimes individual countries like Australia can have recessions, but not at the same time in the US or Europe for example. Spreading your earnings around gives that business more of a chance of continually growing profit if Australia has a downturn.
You just have to look at which businesses are currently generating profit growth and share price growth to see that lots of them have a good proportion of their earnings based internationally.
Some of the ones that come to mind are: CSL Limited (ASX: CSL) Macquarie Group Ltd (ASX: MQG), Pro Medicus Limited (ASX: PME), Xero Limited (ASX: XRO), Webjet Limited (ASX: WEB), Breville Group Ltd (ASX: BRG) and a2 Milk Company Ltd (ASX: A2M).
Foolish takeaway
There are many quality businesses on the ASX with overseas earnings. You don't have to leave the ASX to get exposure to business with earnings in Asia and North America.
Some of the international earners that I'd like to add more of to my portfolio are Costa Group Holdings Ltd (ASX: CGC) and Altium Limited (ASX: ALU).
