Five Picks for Export Growth

The trade deficit is large and growing -- we consume far more than we produce.

You already knew that. But how does this trend affect The Millionaire Zone investors?

I believe effects of the deficit problem on the U.S. economy are just now becoming more visible and are starting to accelerate: slower U.S. consumer spending, slower job growth and a weakening dollar.

The American consumer is tapped out and can't afford any more, especially more expensive foreign goods.

Unless, of course, the U.S economy sells more overseas to balance the equation.

In fact, we're starting to see that happening. Exploding growth persists in the BRIC countries -- Brazil, Russia, India and China. Again, this isn't news. But the rest of Europe, in the doldrums seemingly forever, is starting to pick up too. Asia and even Canada -- our largest trading partner -- are prospering.

In fact, Goldman Sachs predicts that the world economy will expand some 4.2% in 2007, twice the pace of the U.S. economy's growth. That's good, especially as the weak dollar makes our goods more competitive.

So to cash in on this growth, you can invest in foreign stocks. But foreign companies are difficult to research, and differing accounting standards and business climates bring risks I've never been that comfortable with.

If you've read my columns, you know that my favorite way to play overseas growth is to buy U.S. companies doing a lot of business overseas. Now, more than ever, looks like the right time to do that.

The February selloff sent a large shock through all markets, U.S. and overseas. But guess who's led the recovery? U.S. retailers? Consumer staples? Nope. In fact, retail has been in the doldrums ever since. The star performers have been the so-called large-cap stocks, just as everyone predicted.

I believe export sales are the reason why. And I always like to have a reason why.

OK, if you subscribe to this model, fine, but how do you identify large companies with strong export sales? Not too easily, as it turns out.

Click here for the video version of this story from Jennifer Openshaw.