There’s something strange going on in Brazil. You might call it a “schizophrenic economy.” Brazil is an economy of two halves. From the outside looking in, it’s a former star player plagued by socialist leaders with no understanding of free-market principles. But from the inside looking out, it’s a booming emerging market with record low jobless numbers, a strong currency, and high interest rates to keep the economy from overheating.
It had to happen sometime. After a decade of outperforming U.S. stocks, Brazil has started lagging behind the States. Now, I have recommended Brazil a number of times in these pages. So in true IL fashion, I hopped on a flight to São Paulo to put “boots on the ground.”
Norway is uniquely placed to protect wealth. It is outside the euro zone, has low public debt, ultra-low unemployment, and a strong and stable currency. It also has the world’s largest sovereign wealth fund…with a staggering $664 billion under management. Think of Norway as the Saudi Arabia of Europe.
Banksters…fat cats…one-percenters… there’s no shortage of put-downs for bankers these days. But not all bankers are evil. And not all banks are created equal. One bank that stands apart is Panama-headquartered Banco Latinoamericano de Comercio Exterior S.A.—or Bladex, as it is more commonly known.
It’s often overlooked, but dividends make up the lion’s share of stock-market returns. According to one study, dividend income made up 35% of the total returns of the S&P 500 between 1926 and 2009. There are two important reasons why this trend is set to accelerate. First, record low bond yields mean that dividend income is more sought-after than ever.
One of the best ways to create cash flow right now is through stock dividends—especially through stocks with exposure to the emerging markets. Cash flow is the amount of money your portfolio “pays you” each year. And by buying a diversified basket of dividendpaying stocks, it can be surprisingly stable.
If you want to see real economic growth, get a taxi through Hanoi at rush hour. Every day, millions of residents of the Vietnamese capital weave their way through the city on newly-bought Chinese and Japanese motorbikes and scooters. Twenty years ago, bicycles were the main form of transport.
The case for investing in Mexico has never been so compelling. And there are four important factors why. First, the Mexican government is planning to introduce important pro-market reforms under newly-elected president Enrique Peña Nieto of the Institutional Revolutionary Party, who takes office next year. He is supported in these reforms by the opposition, center-right National Action Party.
The euro may implode at any moment. The euro zone is deep in recession. The slow-motion debt crisis there trundles on. We still don’t know what will trigger a full-scale meltdown. All we know is that there’s now a good chance it will happen.
The best time to buy stocks and other assets is when investors are running scared. I’ve been banging this drum all year—especially when it comes to Europe. I believe the crisis there is about to throw up a genuinely once-in-a-lifetime buying opportunity for contrarian investors.
I don’t blame the bond skeptics. When most people think of bonds, they think of Treasury bonds—those issued by the U.S. Federal government. Treasury bonds offer yields that are below the official rate of inflation.
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.
Your Own Home in the Sun Kit
Casa de Campo, Dominican Republic
June 7-9, 2012In business, key deals are struck all the time over drinks or on the golf course. It’s no different with property transactions. Well-connected insiders can pay less… access preferential terms… and set themselves up for incredible profits…Like a 34.8% gain in 18 months… or 28.7% in less than a year…That’s how the folks we put on the inside last year are doing. This year, you could be the one getting in early with off-market deals.
Squashed into the back of a Buenos Aires taxi between the two women, I hadn’t been paying much attention. But once they mentioned MercadoLibre, it sounded like a conversation that I overheard several times during my three-week investment-scouting trip to Argentina and Uruguay.
Bull markets are all born in extreme pessimism. That means the time to invest is when the flames are licking higher, not after the fire trucks have arrived. And Europe is up in smoke right now…I’m not calling for the bottom in Europe stocks or for an immediate end to the debt crisis there. Plenty more can go wrong. But contrarian investors “run into burning buildings.”
The world’s consumer power base is shifting. The “rest” are playing catch-up to the “West” right before our eyes. Most investors don’t see this. They are blinded by the doom and gloom surrounding the financial crisis, the debt ceiling, and the gridlock in Washington.
Most investors don’t see fear or abject pessimism as powerful investing tools. But that’s exactly what they are. To maximize your profits you must invest at rock bottom.
This kind of “mega trend” may not be winning a lot of attention in the mainstream media. But it is a critical insight for global investors. The “Age of Man” is literally changing the face of the earth. As such, it will have profound implications on every investment decision you make.
First Eagle Overseas Fund seeks long-term growth of capital by investing primarily in equities issued by non-U.S. corporations. The fund’s management’s research-driven approach seeks to minimize risk by focusing on undervalued securities.
Here’s a trend you can take to the bank: as consumers in the U.S. and Europe cut back on spending, the source of growth for companies will shift to consumers in fast-growing overseas markets.
For the first time, the planet’s population has crossed the seven billion mark. The world’s population has increased more than tenfold in the past three centuries, and it is expected to reach 10 billion in this century. To put this in perspective, human biomass is already 100 times larger than that of any other animal that has ever lived on the planet.
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