Does the US still offer investment Opportunities?

Does the US still offer investment Opportunities?

It is easy to dismiss the US as a busted flush. Much like the UK, the country is indebted, its housing market is weak and its currency is sliding. It is embroiled in expensive wars that it shows little sign of winning. And even its key strength - its propensity to consume -is failing.

Equally, from an investment perspective, active managers have traditionally struggled to beat the index consistently in a super-efficient market. Does the US still merit a significant chunk of an investor's portfolio?

The US saw a return to growth in the third quarter of this year, with GDP rising 3.5%, but the economy is still facing significant structural problems. Government, corporate and consumer debt is huge, which will constrain growth for the foreseeable future. Furthermore, the country is losing its dominant economic position to Asia, which faces few of these problems.

As such, it would be easy to dismiss the US and plough money into the Asian growth story instead. However, the US has a number of things in its favour. First, it has some of the best companies in the world - Microsoft, Apple, Amazon, Coca-Cola and Colgate Palmolive, to name but a few - and, far from these companies being damaged by the growth of Asia, many may be front-line beneficiaries. To date, Asian consumers have shown a propensity for Western brands over domestic ones.

The US still holds a significant amount of global intellectual property too. Asian companies are building proprietary technology, but the US is developing all the time. It is difficult to imagine a rival emerging to lead technology forward in the same way that, say, Apple has done over the past few years.

The US is undoubtedly indebted, but it has paid down debt before and there is no reason to think it cannot do so again. It will just take some time. US citizens are suffering and need to deleverage, but they have shown themselves to be resilient and enthusiastic consumers over the years. A lot is resting on the emergence of the Asian consumer, which is not yet a proven force. Emerging Asia will have to make a success of its welfare plans before this is likely to happen.

The US is still the largest economy in the world. Its business and economic practices are the most sophisticated and, no matter how it may have seemed recently, the world still dances to its tune. It is certainly more vulnerable than it has been, but its economy has proved extremely adaptable in the past and there is no reason to think that it will not prove so again. It is not the time for investors to turn their backs.