It seems that American investors are leaving the world’s greatest economy. The United States has continued to be the preferred location for investment for many years. The dollar was doing well, and dollar dividends are appealing. However, the tendency is shifting.
Over the past six months, foreign investors who have made their home in the United States, known as “domiciled investors,” have taken out $75 billion, with $52 billion of that amount occurring in the last two months. Brazil and South Korea are the two main emerging-market nations that benefited from US capital flight. Brazil received $1.2 billion, while South Korea received $2.8 billion.
The dollar has become weak, which implies that purchasing foreign assets when the dollar is weaker means paying more for less. This is why capital is fleeing the US. Since Donald Trump took office again, the dollar has lost ten percent of its value. The skyrocketing value of AI-related tech stocks has also raised concerns that they may be overpriced and that there is no evidence of their profitability in actual business dealings. In industrialized nations like Japan and Germany, investors are eager to invest in hard economic assets.
The Bank of America’s fund manager poll, which revealed investors moving from US stocks to foreign equity markets, reflects the sentiment of American investors. According to Gerry Flower, global private manager for UBS’s global and European stock strategies.
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