Contrary to what you may think, the U.S. is not the best performing market in the world. Frank Holmes discusses why a great place to search for yield now is overseas… Read more...
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With most of the world's major economies running the printing presses to the point of absurdity, there's one country that's in the catbird seat when it comes a strong, stable economy.
It's a country that runs a budget surplus, has interest rates above the level of inflation, and also has a trade surplus.
And it's only going to get better.
Here's the country that's got its economy firing on all cylinders...
While the Standard & Poor's 500 Index 10% first-quarter gain was great, it wasn't the world's best.
One of the standout performances in 2013's first quarter was in a market that's off many investors' radar screens: the Philippines.
The Philippine stock market, valued at about $236 billion, rose by 17.8% in the first quarter.
If you're looking for ways to profit from soaring emerging market growth, you don't have to go overseas.
Some of the best investments to play emerging economies are in the United States.
Investors need exposure to emerging market growth, as U.S. GDP grew a paltry 2.2% last year, ranking 137th worldwide. The prospects for this year don't look much better.
This Eurasian country was the best performer among the emerging markets in 2012. Turkish stocks climbed an astounding 56% last year. On a recent trip to Istanbul, Frank Holmes investigated this surprising trend. Take a look.
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.
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.
On Monday they released a new report on international capital flows which relaxed its opposition to exchange controls.
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.
Believe it or not the world doesn't revolve around the United States-or the Western world.
September was not too shabby either in terms of dividends and payout increases. At this point it is fair to say 2012 will prove to be a very favorable year for income 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.
Fifty years later, though, I like it for a slightly different reason. It's become a place where I like to invest.
In fact, I believe the region is the world's newest "sweet spot" for investors.
Of course, you don't hear much about the economies of Southeast Asia. Given the media's penchant for bad news, that alone should tell you something.
But unlike the U.S., Europe, China, India and Japan, the region is doing just fine, which is why you should consider putting some money in places like Malaysia and Singapore.
In fact, in a moment I'm going to tell you what my favorite company in the region is.
It's embodied by those words penned so long ago by a young Thomas Jefferson...
It's the idea that "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
If you don't believe me, just take a look at the performance of the iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM).