Invest in Brazil Now!
My article for Investor’s Daily Edge on 04/09/09 recommended the iShares MSCI Brazil Index (EWZ). This Exchange Traded Fund holds a nice basket of Brazilian stocks and seeks to mirror the Brazilian stock market as measured by the MSCI Brazil index.
If you took my advice, you’d have seen a big short-term gain as the Brazilian ETF rose over 22% in less than two months. Our staff here at Investor’s Daily Edge strives to give you information that can help you accumulate wealth and enhance your financial well-being.
If you missed this opportunity to get into EWZ, it’s not too late. This Brazilian ETF has the potential to run much higher as Brazil is one of the best emerging markets to invest in. Let me explain:
During a recent trip to Brazil, I observed an economy that is flourishing. Brazil is a country that is blessed with a bounty of natural resources. Two hundred million Brazilian people are striving to live a better life and they are well on their way to becoming a developed country like the U.S. or Japan. I foresee Brazil becoming a global superpower within 20 years.
Brazil is an agricultural and commodities powerhouse with large and well-developed mining, manufacturing, and service sectors. The world’s population is exploding and Brazil’s rich farmland has the potential to feed the budding masses. Plus, Brazil has plenty of oil deposits; in fact, they just found another 8 billion barrels in the Tupi offshore oil field. They have plenty of natural resources that they can export to the rest of the world. And, once the world finally pulls out of this economic crisis, you will see commodity demand and prices skyrocket… Brazil will be sitting pretty.
Brazil continues to push industrial and agricultural growth and development of its vast interior. Exploiting huge natural resources and a large labor pool, Brazil is at the moment South America’s top economic power and is expanding its presence on the world stage.
Brazil’s ethanol industry is powerful and is on the rise. The country turns a good portion of their sugar cane crop into alcohol fuel for their cars. The world is seeking alternative sources for traditional fuels and Brazil is well positioned to deliver.
America was Brazil’s top trading partner until last month, but China surpassed the U.S.! And, China is looking to widen its exposure to Brazil’s massive amounts of natural resources. From 2006 to 2008, China/Brazil trade surged at an average annual growth rate of 50%.
China is securing energy resources to power its economy by providing a loan to Brazil’s Petrobras which will supply China with 150,000 barrels of crude a day this year and 200,000 barrels in 2010. Brazil and China recently signed multiple accords to promote trade, investments and cooperation between the two nations. And this bilateral trade will be done using Brazil’s currency the “Real” and China’s currency the “Yuan”, not the U.S. dollar.
Brazil’s economy has been quite stable under President Lula da Silva. He is pushing further economic reforms to reduce taxes and increase investment in infrastructure. Brazil’s debt achieved investment grade status early in 2008, which in turn encourages more foreign investment.
Plus, Brazil has a growing tourism industry due to their amazing beaches and friendly people. Check out this incredible picture of Rio.
Not only is Brazil a beautiful country, but it’s a great place to invest for the long run. The Brazilian stock market is on fire right now and they are immune to a lot of the ills that America is suffering from, like exposure to toxic assets. Make sure you put a small portion of your portfolio into emerging markets like Brazil.
Again my favorite way for you to play Brazil is the iShares MSCI Brazil Index (EWZ). This Brazilian ETF offers excellent profit potential. Pick some up today…
Best Wishes,
Ted Peroulakis
