From the international-news-that-could-very-well-be-pertinent-to-your-financial-future department, Sweden has announced that it plans to abolish its decades-old wealth tax.Does that sound moot? At first glance, perhaps. After all, Sweden is far away, and Swedish tax policy is not directly relevant to U.S. taxpayers.
However, a more critical look reveals that Sweden's move underscores an ongoing global trend toward privatization, markets and investment, and away from policies that restrict capital inflows, investment, and, more generally, commerce.
U.S. readers are familiar with investment conditions stateside in the last two decades, during which federal income taxes have been reduced and the nation has pursued a more business-friendly regulatory policy.
But what some readers may not be readily aware of is that the lower-tax/encourage-commerce trend has also been a feature of economic policy in Europe and Asia. To be sure, Europe's income-tax rates, in general, remain higher than those in the U.S., and many states in those regions have more-extensive social welfare states than the U.S., but the move toward investment, commerce and markets is clear, and Sweden's wealth-tax abolishment is further evidence.
The wealth tax -- which a handful of developed countries retain -- was designed to keep the rich from getting richer, but is increasingly seen as hampering investment and commerce activity.
Equally significant for investors, where there's a secular trend, there's often a stock investment opportunity: The pro-commerce trend bodes well for financial-services companies with a global footprint, i.e. who have the network and resources to recruit new individual investors in more commerce/capital-friendly markets. Those companies include American Express (NYSE: AXP), Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM), Deutsche Bank (NYSE: DB), and Bank of America (NYSE: BAC), among others.
All of the above are well-positioned to benefit from what's likely to be a growing pool of "new investors" around the world in next decade.
In the days ahead, The Fly on bloggingstocks.com will evaluate the strengths and weaknesses of each company.
For now, it's just important to know that the trend toward more investors around the world is an investment opportunity for current investors.
Equally significant for investors, where there's a secular trend, there's often a stock investment opportunity: The pro-commerce trend bodes well for financial-services companies with a global footprint, i.e. who have the network and resources to recruit new individual investors in more commerce/capital-friendly markets. Those companies include American Express (NYSE: AXP), Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM), Deutsche Bank (NYSE: DB), and Bank of America (NYSE: BAC), among others.
All of the above are well-positioned to benefit from what's likely to be a growing pool of "new investors" around the world in next decade.
In the days ahead, The Fly on bloggingstocks.com will evaluate the strengths and weaknesses of each company.
For now, it's just important to know that the trend toward more investors around the world is an investment opportunity for current investors.
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