Investors in emerging markets usually look to the Big Three: international companies, consumer companies, and commodities. These are the bread-and-butter investment opportunities that come with a very large upswing in growth. But when global growth gets shaky, investing in growth markets—or even former growth markets, for that matter— gets trickier. Nowadays you can’t just throw a dart at a board and pick a winner.
Every once in a while, an investor with fresh money to invest should pause and ask an important question: “What asset class can I buy that is unquestionably cheap?” The asset class on the bargain-basement table today is emerging markets. Hard to believe, but you can buy most emerging-market stocks today at valuations that are nearly as low as what they reached during the 2008 financial crisis.
Emerging markets are, and will remain, the centers of global economic growth for the foreseeable future. That’s why all serious investors should have them in their sights, especially when they offer us a cheap, low-risk entry point, as they do now. True, investors in emerging markets have had a tough time in recent years. Prices have been sliding since April 2011, with especially sharp falls in the second half of 2015. Commodity prices have collapsed, which has slammed the economies and local currencies of the big commodity exporters, such as Brazil, Russia, Chile, Colombia, and Peru.
Over the next two years, the emerging-market scene will have a new favored son… Overall, India has been a bit unloved by international investors—never quite living up to the hype that the rest of the BRICs seem to enjoy. But that’s all changing. Favorable demographics and a businessfriendly government have set India on the path to renewed growth again.
I ’d spent the day with Mr. Khun, my translator, as we hopscotched between meetings in Rangoon, Burma, on a sultry morning. I had arrived in the middle of monsoon season and the day’s torrential rains had bathed the city clean. Now, the tropical, noonday sun was boiling the puddles into a steamy vapor that embraced the city like a hot Wet-Nap. A pair of large, sliding glass doors glided open and a wave of air-conditioned cool slammed into me.
Oil prices have fallen hard this year. The same thing happened in the first half of last year due to soaring production. The reasons for the decline in price are fourfold. Last year, U.S. production rose to its highest levels since the 1990s. Furthermore, OPEC saw its production leap to a nearly two-year high in September, averaging 30.96 million bpd (barrels per day). Meanwhile, the International Energy Agency (IEA) has cut its global oil growth forecasts for 2015 as a result of second quarter consumption sliding to a 2.5-year low.
Many emerging markets are actually in much better physical shape than the United States. So for instance, while people think of countries like Indonesia as being highly risky from a fiscal standpoint, Indonesia is actually on much sounder financial footing than the U.S.
If you want to increase your future returns while reducing your risk, you should add some emerging-market stocks to your portfolio. It may surprise you that adding riskier, emerging-market assets to a portfolio will reduce overall risk, but it shouldn’t. These markets do not move in lockstep with the U.S. market, which hit a series of all-time highs in the fourth quarter of 2013.
For any careful investor it’s important to understand not just the current trend but rather where we’re headed. As such, keep an eye toward the future for the growth leaders of tomorrow. Since 2007, emerging markets have been outspending American consumers. Take a look at the charts here to see how the international growth/redistribution of current consumption trends will change the landscape of international business.
Let me warn you up front: You probably won’t like today’s recommendation. It has nothing to do with the stock market. Today, I am going to recommend that you dip your toe into a different market—and buy bonds. I bet not one in 100 readers of this magazine gives the bond market as much attention as he gives to the stock market. And it’s fashionable these days to talk about all bonds as “bad” investments.
Dividends “pay you” to own a stock…they can give you a regular income and they can help you pick proﬁtable, mature companies that generate lots of cash. My favorite way to “get paid” dividends is in the Brazilian power-generating sector.
Last week, I was at an investor conference in Switzerland. As is typical these days, one of the big topics was investing in the emerging markets.
As you know, the last six months haven’t been stellar for the emerging markets. But what you’ve got to understand is that you can’t base your investing decisions on what’s happened in the past. Because the markets don’t care about the past. They care about what will happen in the future.
I’ll be blunt. I have no time for Communists. Theoretically, Communism is just plain dumb. But on a practical level, it’s even worse.
Although you wouldn’t know it from tuning into CNBC or opening the Wall Street Journal, the world is actually in a new “super cycle” of growth.
The trend is up. This may sound odd. After all, a lot of investors are pretty gloomy these days. In America, house prices continue to head south… about 1 in 10 people remain unemployed… and Washington is in disarray over what to do about its spiraling debt problem.
Earlier this week, I talked about the most important big trend in the world: the growing pressure on our finite natural resources as populations and wealth grow in the emerging economies. Today, I want to tell about how to play this trend.
What happens next? The answer is nobody knows. But as investors, we’re always trying to answer this elusive question.
My job takes me all over the world. So far this year, I’ve traveled on your behalf to visit Singapore, Cambodia, Thailand, Vietnam and Brazil. And we’re not even at the halfway point yet!
At International Living Investor we have a simple mission: to help you profit from the world outside of America’s borders. And to do that we look at three specific types of investment.
Things have turned ugly for the dollar again. As I told you on Monday, the dollar has been enjoying a short–term rally…rising against other world currencies.
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 hear the mainstream media tell it, the commodities bubble has burst. Don’t you believe it. Commodities prices will be back. In fact, 12 months to 24 months from now, gold, silver and other commodities will be trading at higher prices than they were just a few weeks ago – when they were trading at record levels.
There are three main routes into overseas markets. 1) You can invest in overseas stocks (or in domestic stocks that make a large portion of their profits from high-growth overseas markets).
Successful overseas investing all comes down to the “integrity” of each country’s business system. You can get a good idea of this by looking at the Transparency International Corruption Perceptions Index, which is published every year.
It’s official: The end of the “Age of America” will happen in 2016. That’s when, according the latest forecasts from the IMF, China’s economy will surpass America’s.
The U.S. debt crisis became even more urgent when Standard & Poor’s finally downgraded its outlook for U.S. debt. Of the 17 countries that S&P has rated AAA, the U.S. is the only sovereign that carries a negative outlook.
What’s happening in Europe should be a wake-up call for America. Over the weekend, Finnish voters gave a big boost to its euro-skeptic True Finns party. The party says Finland should stop funding Europe’s “squanderers” – Ireland, Portugal and Greece.
Staring at a chalkboard behind the reception desk at my hotel in Campo Grande last night, my Brazilian friend Renato Roscoe let out an audible “tssst. The board showed Brazil’s currency, the real, at R$1.58 versus the dollar. “It’s hard to keep track these days,” said Renato. “The real keeps getting stronger against the dollar. This is crazy.”
House Republicans are steamrolling President Obama to submit three pending free-trade deals. This is great news for the three key emerging markets involved.
On Saturday, I shared with you the first three of my five simple investing rules that can dramatically boost your performance and potentially beat the stock market by following five simple rules.
Most investors operate on some variation of the “set it and forget it strategy.” And that’s why – more often than not – they’re surprised by the terrible things that happen to their money when the stock market stumbles.
The price of “stuff” is going up. Gold hit a new high this week of $1,474 an ounce. Brent crude oil is trading above $125 a barrel. And silver broke through $40 an ounce.
I recently came across some “intel” on China. It comes via a source I met while I was on my recent investment scouting trip to Southeast Asia.
Coffee, sugar and cocoa prices could rise by up to 1,000% by 2014 because of a combination of shortages and loose money policy in the developed world.
I don’t like to lose money. Losing money hurts because finding money in the first place usually means you have to work for it. Think of all those early morning starts and traffic jams on the way into the office.
The developed economies are marked by two key conditions right now: cheap money and excessive government debt. This is mostly a response to the financial crisis that struck in 2007. America, Europe and Japan had accumulated large debt loads before the crisis. But their debt loads grew even bigger, as governments there tried to borrow and spend their way out of recession.
Time is running out for cheap oil. And by “cheap” I mean $100 a barrel. The reason is simple. The Saudis are lying about their spare capacity.
Today, I’m going to share with you something that’s helped some of the world’s richest people build and preserve wealth. In fact, it is one of the most important insights into how to be a successful investor that I’ve ever come across.
On Wednesday, I said many American would-be retirees were “dead men walking” unless they took immediate steps to shore up their retirement accounts. That’s because most Americans haven’t saved enough for a comfortable retirement in the U.S