Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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Latin American Blue Chips Will
Fuel a Global Recovery -- and This Fund Will Outperform Year-in and
Year-out |
Published:
May 11, 2009
If you believe Latin America is undergoing a
secular period of sustained, long-term economic expansion, then
the Latin American Discovery Fund (NYSE: LDF) is a fund you need to consider.
Coming out of the last bear market in 2003, these markets
enjoyed five straight years of almost uninterrupted gains.
During that period, the fund's worst showing was a +45% jump in
2004. And before the ride ended last summer, shareholders had
seen their investment surge over +900%.
Of course, I don't advocate momentum investing and believe that
chasing returns is the surest path to mediocrity. It certainly
didn't work for those who got to the party a little late -- many
Latin American benchmarks lost more than half their value in
2008.
But there's no denying this region has some serious firepower
when the global growth outlook is intact and markets like Brazil
are in favor.
Unfortunately, when the global economy came screeching to a
halt, this story lost some its luster. The region relies heavily
on commodity exports. And without rabid demand from China, the
outlook for Brazilian shipments of soybeans, crude and iron ore
suddenly clouded over -- as did the earnings forecasts of
bellwethers like Companhia Vale Do Rio Doce (NYSE: VALE).
But as I have mentioned recently, a bold stimulus package has
China back on the
right track. In fact, for the first time since the
1930s,
the U.S. is no longer Brazil's largest trading partner -- it has
been overtaken by China. Even at half-speed, China still
imported approximately $600 million worth of Brazilian sugar,
coffee, and other agricultural products in March. That's about
+50% ahead of last year's pace.
The two countries reported over $3.2 billion in total bilateral
trade volume last month, and so far this year Brazil has enjoyed
a healthy trade surplus of $6.7 billion. Those numbers make it
easy to see why China has pledged to invest heavily in Brazilian
infrastructure to avoid distribution bottlenecks and ensure a
steady supply of raw materials.
Meanwhile, rebounding commodity prices, bullish comments from
emerging market guru Mark Mobius, and upbeat industrial data
from China have all helped Brazil's Bovespa index retake the
50,000 level on heavy trading volume. That marks the highest
point for the benchmark since last September.
All of this has been welcome news for LDF. While the fund spans
all of South America, the lion's share of assets (60%) are sunk
in Brazil. (Most of the remainder is invested in Mexico, and to
a lesser extent Colombia and Chile.) As you might expect, the
portfolio is heavily influenced by the oil and gas and mining
sectors, but also offers exposure to some of the region's top
banks, telecoms, retailers and infrastructure firms.
Lately the fund's managers have been gravitating towards
established industry leaders that are gaining market share from
weaker rivals. They aren't yet convinced the cyclical downturn
in commodities is over, but find the valuations and earnings
visibility of financial and consumer-oriented stocks
particularly attractive.
Of course, those comments were made in the last annual report on
December 31, so management may see things a bit differently
today. But this team has been spot on with most of its calls
over the long-haul -- you don't outperform 99% of your rivals
over the past 3, 5, and 10-year periods by over-weighting the
wrong sectors or countries.
Action
to Take -->
Brazil's central bank has just slashed interest rates by a full
percentage point to the lowest levels on record. The country
has done a remarkable job of implementing disciplined fiscal
reform and eliminating hyper-inflation (an Achilles heel in
years past).
I still think the region will see a few more economic hiccups as
it baby-steps towards recovery, any of which could quickly wipe
out recent gains. And given how volatile this region can be, I
prefer to wait until we're on firmer footing.
But beyond that, any bet on global economic expansion will point
right to commodity-producing nations like Brazil and Chile. I
think these developing markets will become more powerful in the
years ahead, and LDF has proven itself to be the best way to
harness the growth in this region of the world.
Good investing!
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Nathan Slaughter
Editor
The ETF Authority, Half-Priced Stocks
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| To receive
in-depth guidance on today's leading exchange-traded funds (ETFs), plus
a proprietary ranking system designed to uncover today's most
profitable funds, please subscribe to
Nathan Slaughter's premium ETF investing newsletter -- The
ETF Authority |
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Disclosure: Nathan Slaughter
does not own shares of LDF.
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Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
actually helps some investment or another.Your investing life can
get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
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