Emerging Markets Stocks 2013: Don't Miss These Next Waves of Growth
Amid a turbulent market environment in 2012, emerging markets stocks have been, well, turbulent.
Some markets (Colombia, Mexico and Thailand to name a few) have performed well. Others have disappointed (Brazil and Russia stand as two laggards.)
But as Money Morning Global Investing Strategist Martin Hutchinson explained last week, economic growth has shifted to these developing economies.
"The IMF's World Economic Outlook projects anemerging marketsforecast with growth at 5.6% in 2013. That's down slightly from 2011 but far ahead of the measly 1.5% growth projected in the "advanced economies,'" wrote Hutchinson in his 2013 emerging markets forecast. "That means investors need to focus heavily their investments inemerging markets, as we have done successfully over the past few years."
Plus, there is no getting around the fact that emerging markets stocks are cheap. The broader emerging markets universe currently trades at a 20% discount to the developed world. And with that valuation discount comes the potential for growth.
But just because valuations are attractive that does not mean all emerging markets stocks are. It pays to be hyper-selective with this asset class.
That's why we've weeded out the weak and come up with some of the most promising emerging markets stocks for 2013.
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Why to Expect Higher Silver Prices Before 2013
As the week comes to an end, Comex December silver prices are trading at $32.45, a slight decline from yesterday. For the week, prices are off about 1%.
Recent economic data and concerning news from abroad have hit precious metals this week, leading to their declines.
Gold has been stealing headlines as fear surrounding the fiscal cliff drives investors to seek safer assets. Should Congress and the president not reach an agreement by early next year, this will provide an opportunity for gold to shine.
But the white metal, with its volatility and recent high prices, can hold its own and also has the potential to increase in the short-term due to a few reasons.
2013 Emerging Markets Forecast: Forget About the BRICs Buy These Rising Stars Instead
Savvy investors know there is far more to the markets than sitting on your hands worrying about the fiscal cliff.
Believe it or not the world doesn't revolve around the United States-or the Western world.
In fact, The IMF's World Economic Outlook projects an emerging markets forecast with growth at 5.6% in 2013. That's down slightly from 2011 but far ahead of the measly 1.5% growth projected in the "advanced" economies.
That means investors need to focus heavily their investments in emerging markets, as we have done successfully over the past few years.
However, there's one new trick investors will have to learn going into 2013: the BRIC economies (Brazil, Russia, India and China) that have been so fashionable over the years, will all run into trouble next year and should be avoided.
The good news is the world is a big place and there are still emerging markets that offer investors the benefit of the world's fastest economic growth. My favorites are listed below.
Why U.S. Natural Gas Companies Are Looking Forward to 2014
Natural gas companies in the United States hope the worst is behind them.
In 2012, natural gas prices plummeted to a two-decade low at below $2 per million BTU. This meant U.S. natural gas lost 87% of its value over a six-and-a-half year period. The low price was thanks to a glut of gas due to newer drilling technologies such as fracking.
But there is hope for a brighter future on the horizon for these companies.
As pointed out recently by Money Morning Global Energy Strategist Dr. Kent Moors, a liquefied natural gas (LNG) export surge is expected in this country starting in 2014. By 2020, forecasts are for the United States to become a force in global LNG trade.
The U.S. is projected to account for nearly 10% of global LNG trade by the end of the decade, from zero today.
"The demand scenario forming is a primary reason why the industry is gearing up for a major resurgence," explained Moors.
And while there are obstacles, Moors said the long-term outlook is filled with profit opportunity.
"The natural gas market is about to get a whole lot better," said Moors.
Jack Welch on Natural Gas Companies: It's "Like the Internet in 1990"
Without unnecessary regulations, natural gas companies could trigger the next great American century, says Jack Welch.
In an interview on CNBC's Squawk Box, Welch explained why he believes an energy-rich and independent America in the 21st century could create a bigger boom in the economy than the Internet did in the late 20th century.
"We have a chance in this country to make this the American century," Welch said. "This gas thing is huge. The gas that we have found is in the first inning – it's like the Internet in 1990. This is the first inning of a great American century."
The Hottest 2013 Natural Gas Story You've Never Heard
The story for natural gas companies in 2013 is an improving one.
As Money Morning Global Energy Strategist Dr. Kent Moors explained last month, he believes natural gas prices in the U.S. will come back strong next year.
But the natural gas story is not just an American one.
Ask the average energy executive what region he or she is really excited about today and the answer you will get is one that was not even on many companies' radar a few short years ago – and one of which many investors are unaware.
2013 could be the year when investors become aware of the vast potential of the prolific natural gas fields in this region, potential that will be unlocked when gas from those fields is someday turned into liquefied natural gas (LNG) and sold to the energy-hungry markets of Asia.
I'm talking about the offshore waters of East Africa.
Why Silver Prices in 2013 Will Continue to Perform
If asked to name the top performing commodity of the past decade, not many would answer silver because of its notorious volatility.
Yet, according to Lloyds TSB, silver prices have delivered the best gains since 2002.
Lloyds data shows that the shiny metal soared 572% over the past decade, beating gold's rise of 428%, which was second best among commodities.
Lloyds said silver beat gold because "[I]n addition to being perceived as a safe haven investment, high demand for industrial uses has also contributed to the strong rise in the price of silver."
The key question for precious metals investors is whether silver will continue to be a good performer in 2013.
Money Morning's Global Resource Specialist Peter Krauth thinks so. He forecasts that silver prices will hit "north of $60 per ounce" by spring.
If his forecast is on target, it bodes well for both holders of silver bullion and coins as well as for holders of ETFs such as the iShares Silver Trust (NYSE Arca: SLV).
Here are five key factors that show why Krauth's forecast for silver prices in 2013 could be right on the money.
Silver Prices in 2013: New Industrial Uses
One positive for silver has to be the aforementioned industrial uses.
At last month's Denver Gold Forum, the CEO of silver producer Hecla Mining (NYSE: HL) Phil Baker made an interesting observation.
He said there was a parallel to what happened to silver usage at the turn of the 20th century to what is happening today. At that time, photography became a major driver of demand of the silver market.
This time though Baker believes it will not be one industry solely driving demand, but a myriad of new users of silver looking to take advantage of the metal's unique properties (such as electrical conductivity) in the electronics and medical fields among others.
Silver's expanding usage in a large number of industries may help to offset the general weakness in the global economy.
Investment Demand for Silver
Another factor favoring silver prices is the continued investment demand for the precious metal from the average person around the world, due in large part to central bank policies.
This News Out of China Supports Higher Silver Prices in 2013
A new report this week by the Beijing Antaike Information Development Co, an information center on the Chinese metals and industries markets, provided some good news for silver prices.
According to the company, analysts forecast China's silver demand to increase as much as 10% in 2013 from investors looking to preserve their wealth.
In an Oct. 22 Bloomberg News interview, Shi Heqing, an analyst at Beijing Antaike, said silver's demand could increase to 7,700 metric tons next year after incurring a 6% to 8% rise in 2012.
Where's the demand for silver coming from? Around 33% is from jewelry and coins, with the remainder in industrial use for photography, solar and electrical appliances, said Antaike analysts.
This is a record level for Chinese silver demand – and good news for silver investors since China is the world's second-biggest user of the metal.
2013 Natural Gas Price Forecast: Higher Prices Mean an End to the Bear Market
After a sustained plunge, the 2013 natural gas price forecast shows the six-and-a-half year bear market may be finally coming to an end.
In all, over the course of the current downturn, natural gas prices declined from a high of $15.78 per million btus (mmbtu) in Dec 2005 to a low of $1.90 in April 2012 — a breath-taking nosedive of 88%.
The reason was an enormous supply glut driven largely by major new unconventional shale plays like the Marcellus and the Bakken where hydraulic fracturing (fracking) has revolutionized the industry.
In fact, fracking helped drillers to produce over 24 trillion cubic feet of natural gas last year, with over 70 billion cubic feet coming from the Bakken Shale alone.
These new finds meant the U.S. natural-gas market was flooded with an average of three billion cubic feet more natural gas every day than the United States consumed.
But those days are coming to an end as supply and demand begin to balance out, setting the stage for rising natural gas prices.
In fact, natural gas prices have already rallied to $3.40 per mmbtu, up 79% in just six months
But regardless the day-to-day movements, the long-term outlook for natural gas prices remains bullish, particularly in light of a steady increase in demand.