emerging markets investing
-
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.
See a decade of results for yourself with our interactive periodic table
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 Emerging Markets: Don't Miss this Reliable Choice
South America, broadly speaking, is a dichotomy for investors.
On one hand, the continent's history is hard to forget. The Argentine currency crisis and Colombia's reputation for nefarious exports are just two black marks on South America's past. A third is a rap sheet littered with leftist, socialist governments with penchants for chasing away foreign investment.
On the other hand, South America has offered investors some spectacular returns in recent years - and not all of those returns are attributable to Brazil.
Brazil grabs much of the attention paid to the Latin American investment thesis because it is the region's largest economy, but there are other countries there with stories worth listening to.
Colombia and Peru stand as two examples of South American countries that are not only easily accessible for U.S. investors, but also offer the potential for some pleasant surprises.
For example, since the market bottom in 2009, the Global X FTSE Colombia 20 ETF (NYSE: GXG) is one of the best-performing exchange-traded funds (ETFs) of any kind. Over the past decade, Colombia has worked hard to shed its image as the cocaine capital of the world. These days, the country is known as a growing oil producer, among other favorable traits, and one of the more open, progressive nations in the region.
However, there's another country that tells South America's best story.
To continue reading, please click here... -
The BRICs Will Be Dead Weight in 2012 – Invest in These Five Emerging Markets Instead
Don't let the headlines fool you, there's lots of money to be made in global investing in 2012.
You're just going to have to be careful - more so than in years past - because right now the line drawn between successful markets and markets that are in danger of collapse is treacherously thin.
Take the fashionable growth markets, the BRICs - Brazil, Russia, India and China - for example.
Dead Weight
It's been 10 years since Chairman of Goldman Sachs Group Inc. (NYSE: GS) Asset Management Jim O'Neill coined the BRIC acronym. His recommendation was certainly effective - one of the best of all time, even. But today, all four BRIC countries face problems, and their troubles illustrate the dangers of following investment fashions.
Just take a look:- China appears the least troubled of the four BRICs. However, it looks to be facing a recession, inflation is approaching double digits and there is a massive bad debt problem in the banking system. Too much money has been invested in uneconomic rubbish - "malinvestment" as the Austrian school of economics calls it. My own guess is that China will do fine long-term but you probably don't want to invest until the size and shape of its problems is clear.
- India has a government that can't stop spending, inflation over 10% and huge corruption. Furthermore, its stock market is still pretty inflated. I wouldn't put much money there until the government changes. Contrary to what you read in the media, almost all the real liberalization progress came under the Vajpayee government of 1998-2004, which the Indian electorate then ungratefully threw out. I'd want an Indian government without the corrupt socialist Congress Party before I'd invest; only then could I be sure that Indian gains would not be poured down a rat hole.
- Brazil has been run by big-spending socialists since 2002 and has been immensely lucky to benefit from the commodities boom. Now the boom has topped out (probably temporarily) but its government is still overspending and has begun to harass foreign investors. Brazil is in big trouble if commodities prices fall.
- In Russia, Vladimir Putin will become President again next March. Need I say more? Like Brazil, Russia has benefited immensely from the commodities boom (in its case, primarily the run-up in oil prices). However, it treats foreign investors even worse than Brazil does, it is even more corrupt and it appears to be running out of money.
If the BRIC's prospects are bad, those of much of Europe are even worse.
The Eurozone's debt problem could have been solved early on by throwing Greece out of the euro (a much deserved punishment). However European authorities have now thrown so much money about in such unproductive ways that it's doubtful whether the euro is even salvageable anymore.
A recession in 2012 seems unavoidable, although Germany may benefit from the problems of its trading partners (if it is not forced to bail them out). Well-run European Union (EU) members that are not part of the Eurozone, such as Poland, may also benefit from the chaos, although Poland's current foreign minister Radek Sikorski doesn't seem to think so.
Japan has done so badly for so long that it may be impossible to revive. If public debt were still at the level of a decade ago, Japanese shares would be a screaming buy, as the market is at a quarter of its 1990 peak. However, with debt around 220% of gross domestic product (GDP) and no sign of the country's budget problems being solved, it may be nearing the point of no return and eventual debt default. On the whole, it's best avoided.
Apart from the United States, that leaves one obvious rich-country market, [To continue reading, please click here...]
-
Emerging Markets Forecast: Which Ones to Hold, and Which Ones to Fold
Late last year, as part of Money Morning's "Outlook 2011" economic-forecast series, I suggested investing in emerging markets that were relatively cheaply priced, and whose economies seem poised to do well in 2011.
My favorite recommendation, Chile, gave a mediocre performance, down 3.2% on the year.
On the other hand, I recommended Russia at several different points last year. That's not a market that I normally favor. But I'd been suggesting that low Price/Earnings (P/E) ratios and a commodity or energy orientation in an economy would be the keys to finding successful emerging markets in 2011.
Currently, the Russian market is up 19.2% in dollar terms, the best performance of any market except Hungary (which also satisfied my "low P/E" criterion, as it is recovering from a very deep recession).
In this installment of the current Money Morning "Quarterly Report" series, let's take a tour of the world's emerging-market economies. We'll study their most recent performance, and we'll identify the best investment candidates for the months to come.
We separate the potential winners from losers. Read on to see which is which...
