emerging markets 2013
In 2001, the BRICs - Brazil, Russia, India, and China - would be the engines of economic growth. These four countries demonstrated enough political stability, population growth, and openness of trade to warrant being acclaimed as the economic superstars of the next decade.
They were named the best investments to make to play global growth. And they delivered.To continue reading, please click here...
How to Invest in Frontier Markets and Tap the World's Fastest Growth
An axiom of investing is that those who get in on great opportunities early make the most money.
Knowing how to invest in frontier markets gives you one of those great, rare opportunities. And it's early enough in the game that most of the profits are still well off into the future.
How to Invest in India's $10 Billion Defense Sector…
Here's how the other emerging Asian power can make money for investors
China's desire to dominate the seas of Asia is being challenged by an emerging regional rival - India.
With this shift in the balance of power in Asia, those who know how to invest in India's military and economic rise stand to profit handsomely from a real "ground floor" opportunity.
Emerging Markets: Is This A "New Chapter" for Turkey?
In 2012, Turkey was the best performer among the emerging markets we track on our Periodic Table showing a decade of returns. All developing countries rose last year, but stocks in Turkey climbed an astounding 56 percent.
While visiting the country last week, I was happy to see my explicit knowledge of Turkey's growth was supported by my tacit knowledge.
Istanbul has been in the midst of a fantastic transformation from an impoverished population to one of affluence. Popping up among the beautiful Ottoman mosques, Byzantine churches, palaces and bazaars are ultra-contemporary art sculptures, shopping malls and lush landscaping.
Investing in 2013: Watch These Emerging Market Rebounders
Broadly speaking, 2012 was an excellent year for investing in emerging markets stocks and ETFs - making some of them a good bet for investing in 2013.
The returns offered by the iShares MSCI Emerging Markets Index Fund (NYSE: EEM), which has almost $51 billion in assets under management and is used by many professional investors as an emerging markets benchmark, indicate as much. EEM, the second-largest emerging markets ETF, returned 13.4% last year.
Given that EEM offers exposure (to varying degrees) to more than 20 countries, the ETF's 2012 performance could leave some investors thinking the just completed year was one big party for developing market equities. Unfortunately, that was not the case as some of the developing world's marquee countries, at least at the ETF level, were absolute laggards.
So while investors were tantalized by the jaw-dropping returns generated by ETFs tracking the likes of Mexico, the Philippines and Thailand just to name a few, chances are there were some mediocre performances from ETFs tracking countries in the same region.
However, there is an important factor when it comes to investing in emerging markets and it is one that runs counter to conventional wisdom.
The conventional wisdom is that it's best to avoid laggards and embrace leaders. But with emerging markets ETFs, they take turns moving between the leaders and laggards categories.
For example, the iShares MSCI Thailand Investable Market Index Fund (NYSE: THD) finished 2011 in the red. In 2012, THD gained over 36%, making it one of the best ETFs tracking any asset class.
While that doesn't mean THD is bound to be a laggard this year, it does mean some emerging markets funds that left investors with sour tastes in their mouths last year have the potential to soar in 2013.
Here are a couple to consider.
Emerging Markets 2013: The Unsung Gems of Latin America
For investors in search of growth in 2013, one of the best places to look is in emerging markets, particularly in the often-neglected region of Latin America.
While most of the talk about investing in emerging markets over the past several years has focused on Asia, particularly China and India, Latin America has been quietly enjoying a nice little boom of its own.
The International Monetary Fund (IMF) projects economic growth in Latin America at 3.2% for 2012 and 3.9% in 2013, compared with growth in the United States of just 2.2% in 2012 and 2.1% in 2013.
But several of the emerging markets of Latin America should perform much better than the regional average.
For example, the IMF estimates the gross domestic product (GDP) of both Chile and Colombia will grow 4.5% in 2013, while Peru's GDP will rise 5.8%, Panama's 7.5% and Paraguay's an eye-popping 11%.
Investors in search of growth clearly need to consider the emerging markets in Latin America.
"Latin America as a whole has averaged 4% real growth in the last decade, far more than you would have gotten in Europe, North America or even much of Asia outside of China and India," said Money Morning Global Investing Strategist Martin Hutchinson.
Still, investors need to research the region before going shopping. Not every Latin American country is a winner.
"The region remains a minefield for investors," Hutchinson said, noting that many of its governments are left-leaning and prone to policies that hurt business.
The Wall Street Journal recently described the emerging markets of Latin America as "a tale of two economies" with the philosophy of the political leadership determining which is which.
"The global slowdown of the past two years has created a divide in the region between countries that pushed a more aggressive free-market agenda and kept a tighter grip on the public purse and those that used the swell in coffers from rising commodity prices to embrace a bigger role for government in the economy," the Journal said.
The key to investing in the emerging markets of Latin America in 2013, then, is looking at the countries' government policies to sort out which are the darlings and which are the dogs.
Lucky for you, we already did the research...
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The IMF's Change on Capital Controls Adds Danger for Emerging Market Investors
The IMF is up to no good again.
On Monday they released a new report on international capital flows which relaxed its opposition to exchange controls.
By doing so, the IMF has now made emerging market investments more risky, especially for retail investors.
What's more, they likely imposed a major new cost on the global economy.
The irony is that the IMF is trying to solve a problem that was caused by foolish global monetary policies. Relaxing its opposition to capital controls is just more of the same.
Removing Federal Reserve Chairman Ben Bernanke and his world-wide sympathizers, and restoring a true free global capital market would work much better.
The IMF does correctly note that capital flows have vastly increased in recent years. That's where the initial problem comes from. It's the solution that's dangerous.
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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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