Investing in Emerging Markets

Investing in Emerging Markets - Stocks and ETFs

Future growth opportunities

Many economists and expert investors are increasingly looking at investing in stocks and ETFs in the emerging markets for future growth opportunities. America will be saddled with enormous debt for years and its economy will not grow nearly as fast as China, India, Brazil and other emerging markets. Much of the future job creation, too, will occur overseas as the developing world steams ahead. Europe and America can't compete in many cases with lower labor costs and its growth will be much less dynamic in comparison. To profit in the changing world of internationalization, you simply must invest a percentage of your allocation in stocks and ETFs in the emerging markets.

Emerging Countries

Things to identify in global markets are the countries' openness to capitalism, good monetary policy and political stability along with potential for economic growth.

China: This country is number one on the list of so many investors because of its huge population, rapid industrialization and high productivity. Industrial output expanded by 12 percent in August of 2009 alone. The country is plowing money into its infrastructure. China Mobile has the largest number of mobile network subscribers in the world and is a promising stock along with a multitude of others. ETF funds across multiple industries are available.

Brazil: This powerhouse in South America is recovering much quicker than industrialized countries. This country is promising as a place to invest. It produces a lot of automobiles, aircraft, and agricultural products and is a leader in ethanol production. Brazil is a big exporter of metals, aircraft, ores and agricultural products. For those afraid to invest in individual stocks, exchange traded funds like iShares MSCI Brazil Index are good choices.

Chile: Chile has a rather large Gross Domestic Output per capita and has an improving manufacturing index. Chile is also the largest miner of copper, accounting for over 35% of the world's share. As the world economy grows, demands for copper will escalate, benefiting this industry and the country's economy. IShares MSCI Chile Investable Index is a hot ETF fund.

India: The country's growth is forecast to be 6% in 2009-2010. This is much better than what is forecast for most Western countries. Once financial liquidity starts flowing, India should start booming again. The IT outsourcing business there is flourishing and expected to become a 2.8 billion dollar industry by 2010. The Franklin India Index fund (FIIF) is an interesting index fund that invests in some of India's best companies and stocks from the broad Sensex market.

Russia: The economic recovery is shaky in Russia. While it is a member of the often used BRIC block of emerging countries, it is perhaps the weakest of the other countries at the moment and its political climate is repressive. But Russia's stock market is cheap. This country's economic future is dubious at the present moment, so invest with money you can afford to lose.

Other countries of interest include Turkey, Vietnam and Thailand. They've all had robust economic expansion. ETFs are available for each country. Many BRIC (an acronym for Brazil, Russia, India and China) ETFs are sold on the market if one doesn't want to be limited to the risks of just one emerging country.