Welcome to the WC, wherein you’re trapped in my mind for eight to twelve minutes weekly.
I was going to spend this week talking about the economics of racehorses. It’s a fascinating space and something I’m getting deep into ahead of an investment we’re looking at.
But.
It’s hard to ignore the markets this week and the response the American administration’s policies are generating.
I’ll not go into the details because I think that will get too political, but
- there’s a trade war on,
- inflation is up,
- GDP forecasts are down, and
- uncertainty is through the roof
The markets are not happy.
Rich people are freaking out and want to know what to do with their wealth if America isn’t the answer anymore.
So let’s talk about it.
What are your options if America is a bit too…volatile…for your liking?
In addition to my ramblings below, Altea members get access to the 43-page report behind this issue.
More info and deeper analysis but fewer images and snark.
Before we begin: Nothing here is investment advice. Do your own research. Please.
Let’s go. 🚀
Are you looking for a high-yield, low-volatility way to invest outside the US?
Yesterday, I dug into a wine finance opportunity that might be right up your street.
It’s for accredited investors only.
Table of Contents
Is It Time to Venture Abroad?
For American investors, the last two decades have felt like watching your hometown team dominate the championship series year after year. The numbers tell a compelling story of US market supremacy that’s been difficult to ignore.
Consider this: over the past decade alone, the S&P 500 delivered a staggering 242% return, transforming a modest $1,000 investment into $3,425. Meanwhile, international markets, represented by the MSCI All Country World Index ex USA, managed just 68% – turning that same $1,000 into approximately $1,680. Extend the timeline to 20 years, and the gap becomes even more dramatic, with the S&P 500 delivering a monumental 618% return.
The American market’s winning streak has been so consistent that many investors have understandably adopted a “why bother?” attitude toward international exposure. After all, when your home field is producing championship results, what’s the incentive to travel?
But markets, like tides, are cyclical.
For instance, between 2000 and 2009, international markets outperformed the US during the aftermath of the dot-com crash and the global financial crisis. The American juggernaut wasn’t always invincible.
And recent results point to a potential reversal.
Europe, faced with the prospect of looking after itself, has rallied, particularly its defense-oriented stocks.
There’s a world, perhaps not too unrealistic, where Europe and India emerge from the 2020s as big winners while the US fades.
This potential inflection point presents both opportunity and challenge for high-net-worth investors. The allure of continued US outperformance remains strong, but the principles of diversification and value investing suggest there might be compelling reasons to look beyond our borders.
Let’s dig into some opportunities arranged from most conservative to highest reward.
Boring but Important
For investors who want to sleep at night without popping Ambien, the international scene has some compelling options that won’t give you a heart attack every time you check your statements. These are the grown-up investments – not sexy, but reliable.
Stable Global Infrastructure & Income Investments
Infrastructure is the ultimate boring-but-rich investment. We’re talking about toll roads, power grids, water systems – the stuff nobody thinks about until it breaks and then everyone loses their minds.
Here’s the beauty of it: people need electricity whether the market’s up, down, or sideways. These assets are throwing off predictable cash flows that often come with inflation adjustments built right in. Which, given recent money-printing adventures, seems pretty handy.
Over the past decade, infrastructure funds have delivered 10-12% IRRs with a fraction of the drama you get from tech stocks. Even more impressive, during the 2021-2023 circus, infrastructure actually outperformed private equity, hitting about 16% returns. Not too shabby for the investment equivalent of sensible shoes.
Consider Australia’s privatized toll roads. They’ve been quietly churning out 5-7% annual cash yields plus appreciation for decades.
Or Spain’s solar farms operating under 25-year contracts that guarantee revenue regardless of whether the rest of the market is having a nervous breakdown.
Getting into this game typically requires $250,000 to $1 million through firms like Brookfield or Macquarie, though some private banks can get you in for less. Too rich for your blood? There are always listed infrastructure ETFs – not quite as pure, but they’ll get the job done.
The triple advantage here is undeniable: essential services never go out of style, inflation-indexed revenues provide a natural hedge against money-printing, and the correlation to U.S. equities is about as low as you’ll find without going full doomsday prepper. Putting 5-10% of your portfolio here feels sensible.
Tax-Advantaged Jurisdictions with Strong Property Rights
Not all foreign countries are created equal. Some are basically financial Disneylands for wealthy people, complete with strong legal systems, rock-solid property rights, and tax policies that make you wonder if your accountant is playing a practical joke.
Singapore is the Harvard of wealth jurisdictions—it has zero capital gains tax, no tax on foreign-sourced income (if you know what you’re doing), world-class banking, and courts that actually work. Its REITs generate 5-7% yields in a stable currency environment. It’s become the “Switzerland of Asia,” except with better food and weather.
Speaking of Switzerland, it remains the OG wealth haven. While not wholly tax-free, its cantonal system can be remarkably friendly if structured properly. More importantly, the Swiss franc has been a beast against the dollar for decades—a natural hedge against whatever monetary shenanigans are happening stateside.
Then there’s the UAE—Dubai and Abu Dhabi—which is going full throttle on the tax incentives: zero personal income tax, no capital gains tax, and 10-year “Golden Visas” for qualified investors. They’ve rolled out the red carpet, installed air conditioning, and handed out cold towels to wealthy foreigners.
A prudent play might involve Singapore REITs for income, Swiss franc bonds for stability, and UAE-based gold storage—all in jurisdictions that don’t worry about how to pay off $35 trillion in debt.
Precious Metals & Wealth Preservation Assets
Gold has outlasted empires, currencies, and every civilization that thought it was too big to fail. Since 1971, when Nixon cut the dollar’s last tie to reality, gold has gone from $35 to around $1,900 per ounce—roughly 8% annually. That’s not bad for a shiny paperweight that doesn’t pay dividends.
Storing physical gold internationally offers distinct advantages over keeping it in your guest bathroom. Secure vaults in Switzerland, Singapore, or Dubai provide jurisdictional diversification and asset protection. These places don’t tax investment gold and respect property rights like they’re religion. Your gold remains yours, period, with vault receipts that specify exactly which bars belong to you.
This strategy proved useful during the 2008 meltdown when gold finished the year up about 5% while the market was experiencing an existential crisis. In 2022, amid inflation and geopolitical chaos, gold held steady while stocks and bonds were being pummeled.
Even central banks – arguably the most conservative financial institutions on the planet – bought over 1,000 tons of gold in 2022. That’s not just diversification; that’s a statement. When the guys printing the money are buying gold, maybe we should take the hint.
There are also tokenized precious metals – digital gold tokens backed by physical metal in secure vaults. Think of them as gold’s younger, tech-savvy cousin – same fundamental value, just easier to move around.
The bottom line: precious metals held internationally serve as both portfolio insurance and a form of wealth that exists beyond any single government’s reach – which seems prudent when debt clocks need scientific notation and money printers have smoke coming out of them.
In addition to my ramblings here, Altea members get access to the 43-page report behind this issue.
More info and deeper analysis but fewer images and snark.
The Goldilocks Options
If you’re willing to take a few more risks the international landscape gets even more enjoyable. These investments won’t make you check your phone every five minutes, but they might beat inflation by a meaningful margin.
European & Asian Real Estate Markets
International real estate is the mullet of investments – business in the front (solid asset backing), party in the back (appreciation potential). Strategic property plays in key global markets can deliver 8-12% returns while giving you someplace fancy to name-drop at dinner parties.
Portugal’s Golden Visa program is the current darling of the “get rich and get out” crowd. By purchasing qualifying real estate (roughly €280,000-€500,000), you don’t just get a property – you get residency rights in an EU country. Despite the government moving the goalposts recently by limiting residential investments in prime areas, there are still plenty of opportunities in commercial properties and renovation projects.
Properties in Lisbon’s rehabilitation zones have been delivering double-digit annual returns for a decade now, combining decent rental yields with steady appreciation. Even better, these investments can qualify for Portugal’s Non-Habitual Resident tax regime, which can exempt foreign income from Portuguese taxation for ten years. That’s not a loophole – it’s a legitimate highway off-ramp.
Asian real estate plays a different game, focusing more on growth trends and modernization. Singapore’s property market is expensive but bulletproof—the real estate equivalent of Treasury bonds, but with better weather.
Japan offers a contrarian play. Aging demographics have created reasonably priced entry points in Tokyo and Osaka, with rental yields around 4-5% and property costs that won’t make you spill your sake.
Even select Chinese markets accessible to foreigners (mainly Shanghai and Beijing) have shown remarkable resilience despite the broader economic drama. Prime properties in these tier-one cities are a bet on China’s continued urbanization and middle-class growth, though you’ll need to monitor the regulatory winds carefully.
For maximum safety with still-decent returns, Swiss or Luxembourg commercial properties offer 5-7% annual returns with low volatility. These aren’t get-rich-quick schemes but rather get-rich-slowly-and-actually-keep-it approaches.
Established International Private Equity
Private equity has consistently outperformed public markets, and this performance edge extends globally. Over 25 years, private equity has delivered roughly 12.8% annually compared to public markets’ 7.6%.
For Americans, international private equity offers both enhanced returns and geographic diversification—the investment equivalent of dating outside your hometown.
European mid-market buyout funds have particularly impressive track records. These funds typically acquire boring but profitable businesses, improve operations, expand regionally, and then sell to someone else who’ll pay more.
The European landscape is littered with thousands of family-owned businesses facing succession issues, creating a target-rich environment for well-managed buyouts. Funds focused on Germany, Switzerland, and the Nordic countries have consistently outperformed their flashier American counterparts with lower risk profiles.
Asian private equity offers a growth-oriented complement that’s impossible to replicate in mature Western markets. Funds investing in sectors riding Asia’s expanding middle class – healthcare, education, consumer services, and technology – have delivered returns north of 15% for decades.
Singapore-based firms focusing on Southeast Asia have been particularly successful, capitalizing on the region’s youth boom and digital transformation.
Secondary market private equity offers an interesting shortcut for those who don’t want to wait five years to see results.
You can get assets at a discount by purchasing existing positions from limited partners who need liquidity while skipping the initial negative-return phase.
Co-investment strategies present another option for the moderately adventurous. Many fund managers allow limited partners to invest directly alongside them in specific deals. These typically come with reduced fees and give you more control, though you’ll need to actually understand what you’re buying.
For those with $1-5 million to allocate, feeder funds now offer access to institutional managers previously reserved for the $10+ million crowd. These structures diversify across multiple funds and geographies, a prudent approach when locking up money for 7-10 years.
Living on the Edge
If your risk tolerance is higher, emerging international markets offer opportunities that don’t exist in mature economies. These strategies aren’t for widows and orphans, but they could potentially deliver returns that make your financial advisor do a double-take.
Emerging Market Investments
Emerging markets are the future growth engines of the global economy. They offer demographic tailwinds and development trajectories that mature markets can only dream about.
Strategic bets in these markets can deliver exceptional returns, though with volatility that might make you puke.
Latin American farmland is perhaps one of the most intriguing risk-reward propositions.
Agricultural land in Uruguay, Paraguay, and parts of Brazil combines several compelling attributes: intrinsic value (people always need to eat), inflation protection (food prices generally rise with inflation), and remarkable stability.
The farmland index has averaged 10.3% annual returns over 30+ years with volatility lower than a sleeping cat – stock-like returns with bond-like steadiness.
In Uruguay, well-managed farmland has consistently delivered 8-12% annual returns through a combination of crop income and land appreciation. The country’s stable politics, strong property rights, and foreign-investor-friendly policies make it the gentleman’s choice for emerging market exposure.
Similarly, Paraguay offers some of the world’s most productive and undervalued agricultural land, though with slightly higher political risk.
Southeast Asian technology investments represent another high-growth frontier, particularly in Indonesia, Vietnam, and the Philippines. These markets are following China’s digital development path but remain 5-10 years behind – creating a playbook for investors to follow.
In these markets, venture funds focusing on fintech, e-commerce, and digital services have been hitting 25%+ IRRs as smartphone adoption drives consumer behavior changes.
Take Indonesia – the world’s fourth most populous country with 270 million people. Its internet economy grew from $8 billion in 2015 to over $70 billion in 2023, with projections to hit $130 billion by 2025. Early investors in Indonesia’s “super apps” like Gojek have seen returns that would make David Sacks blush.
For the adventurous, frontier markets in Africa and Central Asia offer perhaps the highest risk-reward profile. Countries like Kenya, Ghana, and Kazakhstan are following development models proven elsewhere, often leapfrogging legacy technologies entirely.
Mobile payment penetration in Kenya exceeds the United States, creating opportunities in financial services and logistics that would be impossible in markets burdened with legacy infrastructure.
Direct Business Ownership in Growth Regions
For investors with actual operating expertise (not just those who’ve read a few business books), directly owning businesses in high-growth regions can generate returns that make traditional investments look like savings accounts.
The manufacturing exodus from China to countries like Vietnam, Mexico, and Poland has created golden opportunities for supply chain investments. Many U.S. manufacturers have been setting up shop in these countries to diversify production and cut costs.
Strategic acquisitions of established businesses in emerging markets can deliver both immediate cash flow and long-term upside. A popular approach involves buying family-owned businesses facing succession issues – providing an exit for retiring owners while bringing in professional management and growth capital.
In markets like Poland or Colombia, solid mid-sized businesses can often be purchased for 4-6x EBITDA, compared to 10-12x for similar businesses in developed markets.
Joint ventures with local partners represent a more moderate approach, combining your capital and expertise with their relationships and market knowledge. This model works particularly well in markets with complex regulations or cultural nuances.
Direct business ownership requires significantly more involvement than passive investments, but the potential returns can be astronomical. Many international entrepreneurs report that their overseas operations eventually eclipsed their domestic business in both growth rate and profitability – precisely because they entered markets where competition wasn’t as fierce and costs were lower.
The Tax & Lifestyle Advantage
Beyond just making money, international diversification offers powerful advantages in tax efficiency, lifestyle options, and wealth preservation. By strategically combining where you live with where you invest, you can create structures that make your accountant think you’re a genius.
Residency Programs and Golden Visas
Several countries are selling residency or citizenship in exchange for qualified investments, creating a unique opportunity to blend portfolio diversification with lifestyle and tax benefits. These “Golden Visa” programs have become wildly popular among Americans seeking both returns and escape hatches in an increasingly unpredictable world.
I’ve mentioned the benefits of Portugal and UAE above, but a few points are worth digging into.
Unlike Portugal, the UAE imposes no income, capital gains, or wealth taxes, creating a true tax haven for portfolio management. While UAE residency doesn’t eliminate U.S. tax obligations (because America follows you everywhere like an ex who can’t take a hint), it can provide significant advantages for business structures and investment holdings.
Caribbean citizenship-by-investment programs offer the fastest path to a second passport, typically within 3-6 months.
Countries like St. Kitts and Nevis, Dominica, and Grenada offer citizenship through donations starting around $100,000-$150,000 or real estate investments of $200,000+.
These passports provide visa-free access to 140+ countries, including the EU Schengen area and the UK, creating travel flexibility and an insurance policy against geopolitical madness.
Tax Optimization Strategies
International investors have access to legal structures and planning opportunities that domestic-only investors can only dream about. While U.S. citizens remain subject to worldwide taxation (America’s most clingy relationship), careful planning can yield significant advantages.
Territorial tax systems in countries like Panama, Singapore, and Malaysia only tax income generated within their borders. By establishing residency in these jurisdictions, investors can potentially create more favorable treatment for income generated elsewhere.
For example, Singapore residents pay no tax on foreign-sourced income not remitted to Singapore, creating planning opportunities that make traditional tax-loss harvesting look like amateur hour.
Puerto Rico’s Act 60 (formerly Acts 20/22) offers a compelling middle ground for Americans considering more permanent tax solutions. By establishing bona fide residency in Puerto Rico, U.S. citizens can benefit from a 0% tax rate on capital gains accrued after becoming residents and just 4% on qualifying business income.
This program has attracted entrepreneurs, traders, and investors seeking dramatic tax reductions while maintaining U.S. citizenship—having your cake, eating it, and not paying much tax on the bakery.
Trust and estate planning takes on fascinating new dimensions internationally.
Offshore asset protection trusts in jurisdictions like the Cook Islands, Nevis, or Belize provide estate planning benefits and extraordinary protection from creditors and litigation. When properly established before any claims arise, these structures create a moat around your wealth.
For multigenerational planning, dynasty trusts established in select jurisdictions can preserve wealth across multiple generations without the estate tax repeatedly taking bites like a hungry piranha.
Countries like Jersey or the Cayman Islands and U.S. states like South Dakota allow perpetual trusts that can benefit descendants indefinitely while providing robust asset protection.
How to Get ‘er Done
Executing an international diversification strategy isn’t something you can learn from a YouTube video. It requires careful planning and specialized advisors who know what they’re talking about.
Develop a clear due diligence process for evaluating international opportunities. Key questions include:
- Is this country politically stable or likely to nationalize my assets the minute I turn my back?
- Is the currency reliable or printed on toilet paper as a backup plan?
- What’s the regulatory environment for foreigners – welcome mat or obstacle course?
- What are the tax implications both locally and for U.S. reporting?
- How do I get my money out if things go sideways?
- Are there local professionals with proven track records, or am I the guinea pig?
Start modestly to gain experience before going all-in. Many investors begin with a 10-15% international allocation and gradually increase as they build comfort. Diversify across asset classes and geographically—don’t put all your eggs in one foreign basket, no matter how attractive it looks.
Finally, I will say this one more time for those in the back.
Nothing here is investment advice. Do your own research. Please.
That’s all for this week; I hope you enjoyed it.
Cheers, Wyatt
Disclosures
- I live in Spain, so if you all buy homes here, my property value will go up.
