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2020 Vision

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2. The World is Getting Smaller (and More Prosperous)

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The world is economically integrated and becoming more so. As developing nations grow wealthier from demand for their exports, they are growing a middle class. In turn, this group collectively aspires to the goods associated with the wealth of more developed nations, which increases global consumption, drives global trade, produces investment opportunities and drives stock markets.

A Growing Global Middle Class = Potential for Increased ConsumptionSolid bars show current consumption of cars, cell phones and the number of Internet users.
Shaded bars show potential based on population.

Sources: © 2014 The World Bank: World Development Indicators: United Nations, World Population Prospects; International Road Federation, World Statistics; and International Telecommunication Union, World Telecommunication/ICT Development Report and database. Information is as of 2012 (based on most recent data available, 2005-2012). Internet users are defined as people having access to the worldwide network.

As you can see in the chart above, while the U.S. market for cars, computers and cell phones is relatively mature, there is still significant potential demand for these products in China, India and Brazil. This untapped potential for consumerism translates into growth opportunities for companies doing business in these markets.

The Bottom Line

  • Globalization has blurred the lines between investing in the U.S. and investing overseas.
  • As the growing middle class collectively aspires to the goods associated with the wealth of more developed nations, this increases global consumption, drives global trade, produces investment opportunities and drives stock markets.
  • Speak to a financial advisor for help taking advantage of an increasingly global economy.


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Important Legal Information

Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size and lesser liquidity.

All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions.

For more information on any of our funds, contact your financial advisor or download a free prospectus. Investors should carefully consider a fund’s investment goals, risks, sales charges and expenses before investing. The prospectus contains this and other information. Please read the prospectus carefully before investing or sending money.

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