If you haven't already, consider adding exposure to my favorite two resource rich overseas markets, Brazil and Russia

I’ve been beating the drum on commodities lately. My message: The recent plunge in prices would be short lived. The long-term trend for higher prices remains intact.

To fill you in, last Thursday was a real doozy for all things commodities related. Things got awful bloody awful fast.

Silver and oil prices saw record single-day declines. Oil prices plunged by as much as $13 a barrel at one point.

To say commodities traders were panicked is an understatement.

There are reports of some big oil-consuming companies seeing oil drop from $120 to $117 and buying…only to see prices knife through $110 that same day. Talk about trying to catch a falling piano! These companies made the stupidest investing mistake of the year.

Take a look at the chart below.

As I said on Friday: “If we get a big drop in commodities prices, it will be a great opportunity.” Well we did get a big drop. And as you can see from the chart above, prices are now rebounding.

This should come as no surprise. As hundreds of millions of emerging market citizens enter the middle class and move from the countryside to cities, they start to buy more stuff, heat and cool their houses more, travel by bus and car more and eat more protein-rich diets. All of this increases demand for natural resources.

And because all commodities are priced in dollars, a structurally weak dollar supports higher prices.

So buying natural resources is a great way to play the growth story in the emerging world and to hedge against a declining dollar.

As I’ve said before, there are three main routes into the overseas growth story:

1) You can invest in overseas stocks (or in domestic stocks that make a large portion of their profits from high-growth overseas markets).

2) You can diversify into currencies linked to high-growth overseas markets.

3) You can invest in natural resources that high-growth overseas economies need to keep growing.

We cover all three here at International Living Investor. And I recommend you build your global portfolio with a mix of stocks, currencies and natural resource-related investments.

But whatever type of asset you are buying, it is critical that you understand which side of a growing divide it is on – the divide between the resource-rich world and the resource-poor world.

This is important. Because as resource shortages become more acute over the coming years, countries rich in natural resources will be much better placed for growth. And that means their stock markets…and their currencies…will struggle.

On the resource-rich side of the divide are the likes of Brazil, Russia, Chile and Australia. These places benefit from resource exports. On the other side are the likes of China, India, Singapore, Israel and Japan, which all rely on resource imports to sustain growth.

So what is the bottom line here?

Simple: Pay attention to this growing divide. We tend to talk about the “emerging markets,” as though it were a one-size-fits-all description. It’s not. Far more important is whether it has sufficient natural resources to power growth internally.

If you haven’t already, consider adding exposure to my favorite two resource rich overseas markets, Brazil and Russia.

You can buy into these markets easily through the Market Vectors Russia ETF (NYSE:RSX) and the iShares MSCI Brazil Index ETF (NYSE:EWZ).

If you bought in on IL Investor’s original recommendation of RSX last August you are already sitting on a profit of 28%. This ETF has a 63.5% weighting to the energy and raw materials sectors, including large positions in oil companies Rosneft and Lukoil and gas giant Gazprom. And it has a relatively low expense ratio of 0.62%.

EWZ has a 48.9% weighting to the energy and raw materials sectors. This includes large positions in oil giant Petroleo Brasileiro S.A. and minor Vale S.A. The expense ratio here is also relatively low – at 0.61%.

Remember, the stupidest financial mistake you can make is to sell when other around you are panicking. Use a 25% trailing stop so you can rest easy at night.