The market meltdown in China this year has caused many commentators to proclaim the end of Chinese economic growth.

Yet geopolitically, the United States is much weaker today than it was 20 years ago, unable to make headway even against a decrepit middle-sized power like Russia.

Just five years ago, the BRICS were symbols of future emerging market dominance; now all but one are in trouble and the BRICS concept has gone out of fashion.

For investors, the world is a confusing place. Fortunately, there are some principles that can help you navigate it.

Debt, Debt, and More Debt

Let’s start with what we know.

We had a massive financial crisis in 2008. The world’s authorities resorted to unconventional methods to manage it, and things failed to return to normal as fast as most people expected.

This left the world with huge imbalances. The United States, Japan, and most of Europe are still running unsustainable budget deficits and running up debt that promises to produce a lot of headaches down the road.

The Fed, the European Central Bank, the Bank of Japan, and the Bank of England have kept interest rates close to zero for nearly a decade (double that, in Japan’s case) and swollen their balance sheets to an extent previously thought impossible.

The world is more indebted than ever before.

Meanwhile, some stock and real estate markets are overinflated. The global economy staggers along at a growth rate below those of the last decade. While it hasn’t imploded, productivity growth in advanced economies is worryingly slow.

The list of symptoms shows the global economy is sick, but it doesn’t suggest a cure.

It does, however, suggest a sound approach to investing: buy those markets with low valuations, sound policies, low debt, and favorable (or at worst, neutral) trade balances.

Where to Invest

In such countries, there won’t be an internal financial crisis causing values to crash, nor an externally imposed financial crisis. With favorable trade balances, these countries can finance themselves domestically.