When you are working to establish your investment strategy, one of the things you need to do is invest for growth of your portfolio. In order to do this, you need to make some decisions on where you are going to put your investment funds. You need to take a look down the road, and decide where the best growth potential exists.

Gordy Crawford is a Senior vice president of The Capital Group Companies. In an interview, he said some very interesting things about your investing strategy. He was asked what criteria he uses to choose companies for his portfolio. He indicated that he looks for those industries and countries that have tailwinds behind them. He will first look for the forest, as he puts it. Once he gets “the forest right”, then he is able to worry about the trees. He tries to visualize what the world will look like in two or three years, and then does his stock picking to fit that world. He chooses his stock from the bottom up, one stock at a time.

He sees the major investment markets in a state of decline while the emerging markets, such as Brazil, India, China and Russia are all gaining market share. He feels that over the next 20 years, over 70% of the incremental growth will be in these emerging markets. He acknowledges that there are risks associated in placing your investments in these markets, but he feels that is where the “unmet needs” are going to be.

Energy is going to be one of the most important economic themes of our lifetime, according to Mr. Crawford. The impact of the internet on the media and the digitization of the world are other major considerations for your portfolio. He advocates once again of looking ahead and finding those companies positioned to take advantage of the changing world. Imagine where you would be if you had had the foresight to see the rise of Google or Microsoft when they went public.

Lastly, he feels that equities are still positioned to outperform the other asset classes. He states that depending on an investor’s age and risk tolerance, they should definitely have a diversified portfolio that includes a good mix of equity investments. He also feels that investors should have a substantial investment outside of the United States.

Tags: emerging markets, Investing for growth, investment strategy, stock