Many investors have been extremely negative on the U.S. stock markets for quite some time. They comment on high debt levels, a poor housing market and high unemployment. Even when investors do make a positive statement about the U.S. economy, it's usually somewhat tainted.

Statements such as the “United States is the best house on a bad block,” or “the cleanest shirt in the laundry basket.” These statements are slightly positive but only because others around the world are doing worse at this point in time. Are these statements accurate? If you are an investor today, should you be investing in the “best house on a bad block”?

In my opinion, the fact that China, India or even Brazil have shown more growth over the past few years than the United States, for investment purposes, is not the most important thing to consider. I speak with investors every day and the one question I get asked time and again is, "Shouldn’t we be investing more into some of the emerging markets such as China?"

My answer is, not necessarily. An emerging market such as China has been growing so rapidly for the past five or so years that their government has been forced into aggressively raising interest rates and bank reserves  to slow down their economy. The worry is that inflation will become a major issue, and many other emerging markets have done the same. As you can imagine, this has caused their stock markets to fall quite significantly at times. Therefore, as an example, many investors that have taken an overweight position in some of these emerging markets have had large losses this year. Yet, these are two of the fastest growing regions in the world.

Thus, as an investor, should we be worrying about who is the cleanest of all the dirty shirts or should we try to look at monetary policy to see who is in stimulus mode and put your dollars there? Always remember, the stock market looks forward at least six to 12 months. Therefore, in the United States there are record low interest rates, q government trying to implement some sort of a jobs bill, an accommodative Federal Reserve pumping liquidity into the system and a bottoming housing market. When you look at the BRIC (Brazil, Russia, India, China) nations this year, they are all down between 18 and 23 per cent. So if you are an individual that wants to invest in the fastest growing areas of the world, this may not be the best strategy. I believe you want to invest in companies that are domiciled in country’s that are providing favourable environments to do business and that perhaps do business in the fastest growing areas of the world. This may be a better strategy. These multinational companies will still be affected by policies in these emerging markets but to a lesser degree than if you made an investment directly into these emerging markets themselves.

When people went off in search of riches during the United States gold rush, some were successful and many were not. However, the smart people in my opinion were not those that set out in search of gold. The smart people were those that sold the picks and shovels that the miners required. Thus, regardless of whether a person found gold or not, the individuals that sold the equipment made the money.

There is no doubt that emerging markets are growing at a much more rapid rate than the developed world at this time. However, I believe these countries still require many of the many multinational companies based in places such the United States to help with their growth. Thus, these are the types of companies I wish to invest my money in today.

If you have any questions regarding the above article or are looking for an investment advisor to help you with your portfolio, please visit my website at www.investmentadvisorgta.com. I will be glad to speak with you.

Allan Small is a Senior Investment Advisor with DWM Securities Inc., a DundeeWealth Inc. Company. This is not an official publication of DWM Securities Inc. The views expressed are those of the author alone and are not necessarily those of DWM Securities Inc.