Money Rehab with Nicole Lapin
Economy Anxiety? Here's How to Invest in Foreign Markets
Wed, 09 Apr 2025
Consumer confidence in the U.S. is shaky right now—and with ongoing tariff drama and mixed economic signals, it’s no surprise investors are feeling uneasy. But here’s the thing: the U.S. is not your only option. Today, Nicole explains why looking beyond U.S. borders could be the smartest move for your portfolio right now. From “blue-chip” countries like Japan and Germany to emerging markets like India and Mexico, Nicole breaks down the best global investment plays, how to access them (spoiler: ETFs are your friend), and the tax traps to avoid. Diversification isn’t just smart—it’s essential.
Chapter 1: How can Airbnb hosting be made easier?
So I have written, count them, five books now. But each time I'm in the writing process, I stay at an Airbnb. I love to stay at an Airbnb. When I was actually first launching this show, I was at an Airbnb in Arizona. It was so peaceful. It was stunning. I could be productive and comfortable. The Airbnb was also surrounded by a ton of javelinas.
If you know Arizona, you know they're like wild pig creatures. But honestly, I love them too. Being away for work, for fun, or both is a perfect opportunity to host your space on Airbnb. And if you think that hosting is overwhelming, I have a solve for you. With Airbnb's co-host network, it's easier than ever before to host. It's also a great way to earn some extra cash, which I know we all love.
Now you can hire a quality local co-host to take care of your home and your guests. They can do everything from creating your listing to managing reservations to messaging guests and even providing on-site support. So if you've got a secondary property or an extended trip coming up and you need a little help hosting while you're away, you can hire a co-host to do the work for you.
Find a co-host at Airbnb.com slash host. So I just went to the grocery store and I actually flinched at the cost of eggs. And I don't even really eat eggs. That's how bad it is. Everything feels more expensive. And so I'm hearing from a lot of money rehabbers right now that their credit cards are getting a lot of exercise right now.
Chapter 2: What is a good strategy to avoid credit card debt?
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Chapter 3: Why consider investing in foreign markets?
Well, consumer confidence is continuing to drop in the U.S., and it's just too early to tell what these tariffs are actually going to do to the financial health of the country. One of my favorite economists, Mohamed Al-Erian, says it's a 50-50 chance whether tariffs will be good or bad.
If you're feeling uncertain about where the economy is headed, you should know that you can invest in other economies, too. So today, I'm going to be telling you about investing in foreign markets, why you should, how to do it, and how to avoid any nasty tax surprises. But before I do, let me just be clear here. The United States is still the best economy in the world.
Nvidia alone, for example, even after having a rough couple of weeks, is worth over $2.7 trillion. And that is more than the entire GDP of all of Canada. Warren Buffett, one of the most successful investors of our time, is notoriously bullish on U.S. stocks as well. So I'm not saying by any means that you should abandon your U.S. stocks. Please don't. But if your portfolio is too U.S.
centric, it might be time to think global. In the early 2000s, for example, U.S. stocks were asleep at the wheel while emerging markets like Brazil and India were booming. And let's not forget the United States is also not the only country with a stock exchange.
Global financial hubs like London, Tokyo, Frankfurt, Hong Kong and Toronto each have major stock exchanges where thousands of companies list their shares. Some of the world's biggest corporations like Nestle, Alibaba, Samsung are headquartered outside of the United States and trade on their home exchanges.
So if you're only investing in the S&P 500, you're actually missing out on a huge slice of the global economy. Diversifying across countries helps protect you when one market hits turbulence. And let's be honest, that happens more often than we'd like. The last couple of weeks have not been fun, have they? So let's study abroad, shall we?
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Chapter 4: What are the safest countries for foreign investment?
Just like individual companies, when it comes to whole countries, there's a risk and reward spectrum. Let's start with the safest foreign markets to invest in. And when I say safe, I mean the countries that have the most stable political systems, strong legal protections for investors, and an economy that doesn't just rely on one industry or export. So think of these as your blue chip countries.
Japan, Germany, Switzerland and Canada are notable ones, although Canada is a little bit more complicated lately with all the tariff whiplash stuff. But Canada has a stable banking system, a resource rich economy and strong ties to the US, which makes it a great stepping stone for first time global investors.
Japan is also a good option because it has a mix of tech innovation, industrial strength and investor protections. The yen is also considered a safe haven currency during global economic downturns. You may have seen this if you follow me on Instagram, but I did a video about this. In his latest letter to shareholders, the Warren Buffett himself called out the opportunity that he's seeing in Japan.
Chapter 5: Why is Japan considered a strong investment option?
Six years ago, Berkshire Hathaway started purchasing shares in five Japanese companies, and he says he expects Berkshire stake in those companies to grow over time. All right. Noted, Warren. And then there's Germany, the economic powerhouse of the European Union.
Germany's manufacturing and export-driven economy is one of the strongest in the EU, and it has the longest standing reputation for fiscal responsibility. But we also can't discount Switzerland. Switzerland has a stable government, strong financial regulations, and a reputation for economic consistency. It's neutral in more ways than one.
These countries are not likely to offer cuckoo bananas growth, but that's the point here. They offer lower risk and more stability. Now, if you're willing to stomach more risk for the chance of a higher reward, emerging markets might be your speed. In the early 2000s, the four big emerging countries were collectively called the BRICS. So Brazil, Russia, India and China.
Chapter 6: What makes Germany and Switzerland stable investment choices?
India is definitely still a top contender, but I'm hearing more lately about Mexico, Indonesia, and Vietnam. So maybe the new BRICS are actually the VIMIs? I don't know. I'm just coining this here, right here, right now. If it catches on, remember you heard it here first. Anyway, India still makes the list simply because it's the fastest growing major economy in the world.
It has a young population, a growing middle class, and a booming tech sector. A lot of investors are calling it the next China. Mexico has also risen up the ranks, thanks in large part to nearshoring. Nearshoring is an economic trend that consists of relocating business operations to nearby countries or regions, often with the intention of reducing costs and improving efficiency.
This became a higher priority during COVID when import challenges from other parts of the world disrupted the supply chain significantly. As a result, Mexico is becoming a manufacturing hub for North American companies. Plus, it has trade agreements in place with the U.S. and Canada that make it very attractive to investors.
Chapter 7: What are emerging markets and the BRICS countries?
Again, tariffs have shaken all of this up a little bit, but in the last five years, Mexico has been looking good. Vietnam is a rising star in Southeast Asia. It's benefiting from the global pivot away from Chinese manufacturing and foreign direct investment is flowing in. Indonesia is also a bright spot with a population of over 270 million.
Indonesia is one of the largest untapped consumer markets in the world. Its digital economy is also growing rapidly. But remember, emerging markets come with more volatility. So you'll want to weigh that against your risk tolerance and your investment timeline. So when you determine which foreign markets you want to invest in, how do you actually do it?
There are a few ways, but obviously I'm going to start with my favorite ETFs. These are by far the easiest and most popular way. Funds give you exposure to international markets without having to buy individual foreign stocks. For safer markets, two of the top funds, get ready for some alphabet soup by the way, are Vanguard's Total International Stock ETF with the ticker symbol VXUS.
iShares has a similar one with the ticker symbol EFA. VXUS is up 5.2% over the past year and EFA is up 4.35%. For emerging markets, the higher risk, higher reward kind, there's an iShares Emerging Market ETF with its symbol VXUS. EEM, or Vanguard has a similar one with the ticker symbol VWO. EEM is up 8.6% over the last year and VWO is up 10.28%.
I'm going to pause here just for a sec to unpack something. First, obviously, the historical trend for emerging markets is higher than the safer markets. We were anticipating that, right? As I said, higher risk, higher reward. If one of these countries has a major meltdown, the yield is not going to look as pretty.
Second, the safer foreign markets are not performing as well as the United States markets. VOO, which is an ETF that I talk a lot about on this show that mimics the U.S. stock market, is up over 10% over the last year. So again, the United States, great investment. We're just talking about diversification here. Beyond funds, there's American Depository Receipts, or ADRs.
ADRs basically let you buy shares of foreign companies that trade on U.S. exchanges like Samsung or Nestle. They're priced in U.S. dollars, they follow U.S. regulations, and they're easy to access on platforms like Public, Fidelity, Schwab, any brokerage. If you want something even safer, the right foreign bonds could be up your alley.
You can buy them through international bond funds like the Vanguard Total International Bond ETF, which is ticker symbol BNDX. These often include government and corporate bonds from developed countries. Because investors love bonds for their low risk profile, you're probably not going to want to pick bonds for countries considered emerging markets.
It makes more sense to go with these steadier economies instead. And last and honestly least, you can invest directly in foreign markets. This is the most complex of them all and usually best for more advanced investors or someone who has deep knowledge in that area.
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