Buying Stocks in Emerging Markets

By: Michael Swanson


We lived through the worst stock market crash in over 50 years last year and markets across the planet got taken down in it. But the past few months have brought us a nice rally. What you may not know though, is that the markets of the so called BRIC nations have gone up faster than the DOW and S&P 500.
Take the first four letters of Brazil, Russia, India, and China and you will get the word BRIC. You are going to hear this word more and more, because these four countries are going to experience the most economic growth going forward. That is why the stocks of these countries have gone up so fast off of the recent low in the stock market.
A researcher at Goldman Sachs put the concept of BRIC together seven years ago. He showed that these countries are going to have the biggest economies as far as GDP goes in five decades. Right now most of the big economies are in Europe, but the BRIC nations are going to pass them by.
Being a good investor means being able to spot opportunities like those that exist right now in the BRIC nations and thinking outside of the box. Fifteen years ago it was popular to invest in Japan. But Japan is going to go from having the third biggest economy in the world to number eight by 2050. It is going to get replaced by India which is now number eight. It makes more sense to own Indian stocks than investments focused on Japan.
The United States has the biggest economy in the world right now, but is going to be passed by China by 2050. China already has a greater number of people living in it than any other country in the world. They are coming online in the modern world and the high economic growth in China is only going to happen even faster.
Brazil is also an incredibly attractive place to invest. While the economy of the US shrank over 5.5% in the first quarter of this year Brazil's GDP actually grew. It completely shook off the global financial crisis.
All of these economies are also linked to high commodity growth and the US of energy. The leaders of these countries recently met with the help of Russia to coordinate and work together in a high level economic summit last week. All eyes are on them, because they are the future.
Even people in the United States can invest in the BRIC nations. On the US stock exchanges there are some funds that invest in the countries that investors can buy. There are also several hundred stocks that trade in the US that are from these countries. The potential to profit is enormous. Making money is all about knowing the trend and getting in on it.

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Michael Swanson is the editor of the WallStreetWindow BRIC nations report.

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