Latin America Pulling Away from a Slowing U.S. Economy
Apr 21st, 2008 | By Jason Simpkins | Category: Politics & EconomicsHot Investment Opportunities
Marquez, also a contributor to the Money Map Report, says there are a number of profit plays to be made throughout Latin America.
According to Marquez, investors should focus on Latin America’s wealth of commodities [which are in demand in nearly every world market], and companies that will profit from the region’s growing middle class.
Here are just a few of his suggestions:
- Petroleo Brasilero SA (PBR): Latin America’s appetite for energy is nothing short of ravenous. As of now, three-fourths of the country’s electricity comes from hydroelectric power. That figure will be higher in 2012, when the region’s largest hydroelectric project, the Santo Antonio Dam, will begin producing electricity. Santo Antonio is the first of three Amazon River dams the government hopes will decrease Brazil’s need for fossil fuels. Until then, however, Brazil’s state-controlled oil-and-gas company, Petroleo Brasilero SA will continue to meet the demand.
- Southern Copper Corp. (PCU): South America is stuffed with metals. And with commodity prices soaring, this is a good market to be in. This Phoenix, Ariz.-based mining giant heavily taps South America’s rich copper mines. Though based in the United States, this company has all of its mining, refining and smelting operations in Mexico and Peru. With this stock, however, investors are subject to the volatility of the U.S. market, which doesn’t look very promising in the first half of this year.
- The iShares Standard & Poor’s Latin America 40 Index (ILF)/ iShares MSCI Brazil Index Fund (EWZ): Investors who are wary of investing directly in foreign companies have a few exchange-traded funds (ETFs) to choose from. The iShares Standard & Poor’s Latin America 40 Index – which tracks highly liquid securities in Mexico, Brazil, Argentina and Chile – ended 2007 with a 44% gain. There’s also the iShares MSCI Brazil Index Fund, a capitalization-weighted index that aims to capture 85% of the total market capitalization in Brazil. It invests in a sample of securities and is reviewed quarterly. Last year, it gained a healthy 72%.
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