investing in emerging markets
-
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.
-
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...
To continue reading, please click here...
-
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... -
Emerging Markets Provide Blueprint for Sustained Growth
The United States should look at emerging markets for clues on how to sustain economic growth, according to U.S. Federal Reserve Chairman Ben S. Bernanke.
While the advanced economies of the world have stagnated since 2008, countries like China, Brazil and parts of Southeast Asia have enjoyed growth rates in the 7% to 9% range. Although several have slowed this year, they're still faring better than the economies of the United States and Europe.
"Advanced economies like theUnited Stateswould do well to re-learn some of the lessons from the experiences of the emerging market economies,"Bernanke said in a speech delivered yesterday (Thursday) at a Cleveland, OH forum.
Specifically, Bernanke attributed growth in emerging markets to "disciplined fiscal policies, the benefits of open trade, [and] the need to encourage private capital formation while undertaking necessary public investments."
The so-called advanced economies certainly could benefit from more fiscal discipline. Decades of profligate government spending have created debt problems that are crippling those economies.
In the United States, which has the world's largest debt at $14.7 trillion, the issue triggered a political crisis over the debt ceiling this past summer that roiled stock markets. Although the United States is unlikely to default, the growing debt - 98% of the nation's gross domestic product (GDP) -- hangs over the economy, hindering growth.
In Europe, the situation is far worse. Greece has been teetering on the edge of default for more than a year. It's been sustained only by the flow of bailout money from stronger European Union countries like Germany.
Greece isn't alone, either. Countries like Italy, Ireland, Portugal and Spain also have dangerously high sovereign debts. The crisis has hobbled the economy of the entire European Union (EU), with no end in sight.
One of the main reasons many emerging economies have thrived is that they have avoided the rampant deficit spending that created the crippling debt in the advanced countries.
And because they haven't been struggling, most emerging market economies have much greater flexibility in their monetary policy - they have leeway to lower interest rates - to cope with the current global slowdown.
Bernanke noted that emerging markets account for more than half of total economic activity today, up from less than one-third in 1980.
To continue reading, please click here...
