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Offshore Investment ProgramGraham Duce, managing director of Towry Law Investment, leads the argument for the US markets. Although his offshore clients are putting a fair proportion of their money into Eurozone investments, he says that it will be Wall Street and Nasdaq that make all the running this year, and that’s where he’s pointing them right now. “The dollar is still king,” he says, “and it will lead the developed-country markets to a much better finish by the end of this year.” He’s particularly encouraged by the recent productivity figures in the US, which seem to show that output is still growing strongly without incurring the inflationary pressures that used to accompany it. The New Economy, in short, is alive and kicking as far as his clients are concerned. Does he worry about the outcome of the US election, given that the Republicans and the Democrats have such different ideas about how to spend the $1.5 trillion cash pile that’s sitting in the US budget coffers? Not really, he says. It’s true that Democrats like Al Gore would want to spend it on improving America’s infrastructure (roads, railways, hospitals etc), whereas George Bush’s Republicans would be more likely to bring in tax cuts that would push up consumer spending - a very different way of influencing the economy - but the markets don’t seem to be fazed by all this, and nor is he. Offshore Investment Program & Jeremy LeachJeremy Leach, group managing director at Equity International, agrees the US dollar is still hanging onto its traditional role as “the principal currency of thought” - the one that hangs at the back of everyone’s minds, especially whenever things start to look difficult. Leach adds that American stocks and funds can also offer substantially lower dealing costs than their European counterparts. There was also some disagreement about the effects of technology stocks on the US markets. Even Duce was happy to concede that the heavy influence of Nasdaq, America’s premier high-tech market, had caused a few problems during the turbulent summer months and he said that this influence would be bound to increase steadily as more and more fund managers stepped up their weighting in US technology stocks. On the one hand, America’s better-developed technology market was an obvious reason for the strong outflow of European investment cash to the States (and incidentally, the transatlantic rush has more than outweighed Europe’s strongly positive current-account surplus in recent months); but on the other hand he felt that the volatility that had resulted in the US markets was unlikely to go away. Offshore Investment Program - LeachLeach spoke for many of our panel when he said that the growing structural convergence of world stock markets has given him a good deal of confidence about the future health of the core markets in the developed world. As the major European exchanges dance their delicate way toward strategic alliances (and perhaps toward eventual consolidation?), and as the more switched-on American exchanges (including Nasdaq) step up their involvement with the European scene, the prospect of a pan-global trading environment with massive liquidity is becoming a real and very attractive possibility. Leach is clear that the growth of these markets isn’t merely performance-based. Like most of his fellow panelists, he says that the real momentum is coming from much stronger consumer demand, especially in the field of pensions and long-term investment. The more money that chases a relatively slow-growing pool of investment, he says, the better the prospects for capital growth. And he’s not the only adviser to point out that the pensions bandwagon has hardly even started to roll in continental Europe. He says that once French or German investors acquire the taste for pension investment that British or American markets take for granted, the groundwork should be in place for a huge further increase in equity prices. 
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