Multinational, Dividend-Paying Companies: The World's Safest Investment

Many questions remain regarding the final outcome of the debt-limit stalemate in Congress. Because this stalemate involves the heretofore safest investment on earth, U.S. debt securities, the options for a perfectly safe hiding place are very few. Furthermore, we remain convinced that this stalemate will be broken and when it is the few investments that are doing well right now like gold and Swiss, Canadian, and Australian currencies will fall in price. In essence to invest in these securities at this time is to bet that the U.S. will not only default but remain in a defaulted condition for an undetermined time.

As we have said on many occasions, it is becoming clear that high-quality, multinational corporations may now be the safest investments in the world. They have piles of cash, significant free cash flows, modest debt loads, compete in every corner of the world and charge a price for their services dictated by the market and not decree, pay taxes in every country in which they operate, and return a significant portion of their annual earnings to their shareholders in the form of dividends. Go back through this list of attributes and you will find few similarities with most sovereign debt in the world.

Source: Rising Dividend Investing

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