The Single Biggest Investment Opportunity in the World
by Alexander Green, Investment U Chief Investment Strategist
Friday, May 4, 2012: Issue #1766
If you’re not taking advantage of this investment opportunity in your portfolio, you’re about to miss the boat in a big way.
A friend I spoke with yesterday had a common lament…
“I don’t see where future economic growth is going to come from,” he said. “The economy is stuck in neutral, the federal stimulus is over, consumers are laden with debt, and they’ve already tapped the equity in their homes. Who has the financial wherewithal to drive growth in corporate profits over the next few years?”
My answer is the citizens of Latin America, Eastern Europe, Asia and the Pacific Rim. In fact, I expect it to ignite the biggest equity boom of our lifetimes.
Skeptical? Then consider this …
Developing countries have already made the right moves. Most of them have already evolved from autocracies to democracies, from state-controlled economies to capitalist economies, from nationalized industries to privatized industries, and from high tax and tariff states to low tax and tariff states.
This is a very big deal. Developing nations cover 77% of the world’s land area and represent 85% of the world’s population. Yet they currently produce only 24% of the world’s gross domestic product.
That’s about to change. There are now 3.9 billion “middle class” people in the world today. Thanks to emerging markets, that number will double over the next 20 years.
As The Wall Street Journal wrote recently:
“In the next 24 hours, approximately 180,000 people in developing countries will be moving from the countryside to cities such as Shanghai, Sao Paulo, Johannesburg. The same will happen tomorrow and every day thereafter for the next 30 years, the equivalent of creating one new New York City every two months, according to the United Nations. These men and women will need everything, electricity, water, food, healthcare, shelter, schools, computers and, of course, jobs. Many have the potential to improve not just their local environment but the world.”
If you’re not taking advantage of this in your portfolio, you’re about to miss the boat in a big way. The problem is the typical investor lacks the knowledge and expertise about how to invest in these markets effectively.
Fortunately, my good friend and colleague Karim Rahemtulla has the answer.
His new book – already on the Amazon.com bestsellers list for “Investing” – is Where In the World Should I Invest: An Insider’s Guide to Making Money Around the Globe.
It seems like every time I speak to Karim, he’s just getting on or off a plane to India, China, Argentina, or Dubai. A global investor in the truest sense, he doesn’t sit in an office and look at annual reports. He gets out there in the field and looks at companies up close. He talks to management, customers, suppliers and competitors. He sizes up operations. And he goes through the financials with a fine-tooth comb.
In his new book, Karim examines major stock market opportunities in huge markets like Brazil, China and India. But he also looks at new frontier markets like Nepal, Cambodia, Vietnam and many more. And he offers plenty of specific recommendations. Each chapter ends with a SWOT analysis: a summary of strengths, weaknesses, opportunities and pitfalls faced by each market.
Feeling risk-averse? Then you need this book more than most.
It’s counterintuitive, but when you blend riskier emerging market assets with your domestic portfolio, you get not more volatility, but less. Why? Because emerging markets have a fairly low correlation with U.S. stocks. When equities fall here, they often rise overseas.
The bottom line is this: Economic growth in the United States, Europe and Japan is likely to stay soft over the next several years. China, India, Brazil and other emerging market nations aren’t just set to boom. They’re already booming.
It’s not enough to just simply know this. As an active investor, you want to capitalize on it. Karim’s new book – an easy read and superb investment guide – allows you to do just that.
The book is now available at bookstores nationwide. However, I notice that Amazon is currently offering it for 35% off the cover price.
For more information, click here.
This could well be the most profitable reading you do this year.