Two bits of news illustrate ‘the squeeze’ taking place in Britain. I’ll get to them in just a moment — and I’ll tell you what you can do about it. But first, what is ‘the squeeze’?

‘The squeeze’ is a media term. It refers to the impoverishment of Mr and Mrs UK. Prices are rising. Meanwhile many — especially homeowners — are seeing their real wealth fall. The squeeze is getting squeezier. This spells danger for the majority of UK investors. HSBC reports that current account holders in Britain have less in their accounts than they did a year ago.

Last year the average customer had a daily balance of £1,050. Today it’s down to £1,000.

That may not seem like a big drop. Only 5%. But add that up over every HSBC customer that has eaten into their funds. Add in similar customers from other banks.

There’s quite a bit of money to be accounted for. What’s happening to it?

Some is undoubtedly being siphoned off into higher interest accounts. A rainy day is coming. We all know it. And Britons who can afford to are topping up the umbrella fund.

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HSBC, however, reckons most of this money is going to meet the rising cost of living.”People are really feeling the squeeze. There is definitely some strain there,” says HSBC’s Joe Garner, using the media buzz word of the moment.In the short run these two phenomena — higher savings and higher spending on essential goods — have the same investment implications. Money — or, to be more precise, wealth — is being sucked out of the UK economy. It’s going into savings accounts. It’s going to commodities producers abroad.Where it’s not going is into the coffers of UK-facing companies. Take Northern Rock (NHRKF), the bank we all own. Today it announced a loss of £585 million in the first six months of the year. The reason? Homeowners are struggling to pay their mortgages. Investors in UK-facing companies have already taken a lot of pain. I expect them to take more.But if you shouldn’t invest in UK-facing companies, where can you invest?

Our answer is simple. Invest in those companies which are not overly reliant on UK earnings. Especially those making money in growing economies. The best British companies have invested abroad. They offer a diverse, global opportunity that offers some protection from our own domestic wobbles.

Our investment team has picked out three such companies, which we believe you should own right now.

Taiwan — the original Asian Tiger

“What’s so great about Taiwan?” I asked.

“It’s got tons of cash and some of the best companies in the world,” replied my colleague Manraaj Singh. “It’s like China, but 50 years from now.”

Taiwan and China haven’t been on speaking terms for half a century. But that appears to be changing.”Some of the best, most dynamic companies in China could be about to get a new lease of life,” says Manraaj. “After the falls in Asian markets there are some fantastic opportunities out there. If these Chinese firms get access to Taiwanese capital… pow!”Find out why an announcement last week could give the Asian investment story a huge shot in the arm — and what you need to do to get in on it.

Until tomorrow

Ben Traynor

Source: Are Your Investments Being Hit by ‘The Squeeze’?