How to Profit from Asia's American Dream

Today, Asian-Americans are the best-educated, highest-income and fastest-growing group in the United States, according to a new report from the Pew Research Center.

Things have changed significantly for the better since 1957, when my mother and I journeyed to the United States from Japan. And the opportunities for Asians to advance their education and/or their incomes in America are leading to opportunities for you to make some smart investments to profit from this powerful trend.

Asia’s American Dream

Our long, two-month trip on a slow naval transport ship must have been frightening to my then-20-year old mother. But she was eager to start a new life in America ... a place where anybody who studied hard and worked hard could be successful.

“In America, anybody can get rich if they work hard,” she told me.

Those lectures and demands for academic excellence from my mother paid off for me, my siblings and my children.

My brother is a high-level executive at Nordstrom, my sister is a skilled physical therapist, and my children have always done well in school. My oldest son Ryan will soon begin his Ph.D. studies, and my daughter Keiko was a perfect 4.0 student and the valedictorian of her class.

I am sad to say that my mother died 11 years ago from cancer, but her dreams have become a reality for Asian-American families all over the United States.

A new study from the Pew Research Center, “The Rise of Asian Americans,” showed just how far Asian-Americans have come. And this was quite a surprise to me, but Pew Research reported that Asians are now immigrating into the U.S. in greater numbers than Latinos.

In 2000, roughly 1.2 million Latinos immigrated into the United States while only 400,000 Asians moved here. This figure has changed to approximately 400,000 for both groups, but Asian arrivals have held a slight lead since then.

Last year, Asian-Americans accounted for 36% of all immigrants while Hispanics accounted for 31%.

Pew concludes that shift in immigration leadership was a combination of declining illegal immigration from Mexico because of beefier border control and a weak U.S. economy, while the demand for highly skilled workers from India, China and South Korea increased.

Overall, Asian-Americans still make up a fairly small percentage of our population. The 2011 Census numbers showed that 5.8% of the population is Asian while 16.7% is Hispanic.

By the way, the six largest Asian subgroups are Chinese, Filipinos, Indians, Vietnamese, Koreans and Japanese.

Asians’ Ascent in America

These immigrants all have one thing in common: They are looking for a better life.

When my grandfather, Fusakichi Sagami, arrived in the U.S. more than a hundred years ago, he and other Asian-American immigrants were uneducated and limited to what Pew Research called “low-skilled, low-wage” jobs.

My grandfather worked in kitchens as a dishwasher and then as a cook until he saved enough money to buy a small vegetable farm in western Washington.

The hard work of those early immigrants has paid off.

“A century ago, most Asian-Americans were low-skilled, low-wage laborers crowded into ethnic enclaves and targets of official discrimination,” says Pew.

These days, the median annual household income of Asian-Americans was reported at $66,000, with Indian-Americans accounting for $88,000, compared with a U.S. national average of $49,800.

The educational credentials of the new immigrants are impressive. 61% of the immigrants from Asia ages 25 to 64 have at least a bachelor’s degree, making them the most highly educated group of immigrants in U.S. history.

That is double the percentage of non-Asian immigrants.

Asian immigrants receive more than 75% of H-1B visas, which are offered to highly skilled workers in specialized fields such as technology.

Finding Education in America

Asians are not only coming to the U.S. to work but also to attend college. Today, the majority of international students enrolled at U.S. colleges are from Asian countries.

Those Asian students are focusing on science degrees. Among all doctorate-holders who live in America, a majority in computer science (57%), electrical engineering (57%), civil engineering (54%) and mechanical engineering (52%) come from abroad.

Now, those Asian students don’t just show up in the U.S. and enroll in Harvard or Stanford. Every foreign student needs to prove his or her proficiency in English by passing the TOEFL (Test of English as a Foreign Language).

There are several ways to profit — and handsomely, at that — from helping those Asians obsessed with education. There are TEN Chinese education stocks listed on the U.S. exchanges. Yup ... TEN stocks.

  • ATA Inc. (ATAI) provides computer-based training courses to help pass professional certification exams such as banking, insurance and accounting.
  • Ambow Education Holding (AMBO) has a unique combination of hands-on personal tutoring supplemented with online training.
  • ChinaEdu Corp. (CEDU) is the Chinese equivalent of the University of Phoenix, offering online college degrees.
  • China Distance Education Holdings (DL) offers online education and test preparation courses specializing in accounting, law, healthcare, construction, engineering and information technology.
  • China Education Alliance Inc. (CEAI on the Pink Sheets) sells “education resources” online, a fancy name for a huge database of informative practice exams.
  • ChinaCast Education Corp. (CAST) actually owns several Chinese universities and is expanding its enrollment with online degree options.
  • New Oriental Education & Tech. Group Inc. (EDU) is the largest English and college entrance exam preparation school in China.
  • TAL Education Group (XRS) is the largest private educational tutoring company in China.
  • Noah Education Holdings Ltd. (NED) sells electronic education materials, and distributes its content primarily through handheld digital learning devices.
  • Xueda Education Group (XUE) is also a private tutoring company but differs from TAL Education in that it tutors university students as well as high school students.

Education is a rock-solid industry that has a very bright future and has the ability to prosper no matter what happens to the U.S. economy.

However, that doesn’t mean you should rush out and buy any of the other above-mentioned stocks today. As always, timing is everything so be sure to do your own due diligence before committing money to any new positions.

Until next time,

Tony


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Posted 06-29-2012 11:26 AM by Tony Sagami
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