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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (66794)	10/3/2010 10:43:33 AM
From: elmatador	Respond to of 217699

GDP made of consumption vs GDP made of production Emerging markets merit a look By Gail MarksJarvis Chicago Tribune Where in the world does an investor make money when 70 percent of the U.S. economy is based on consumers, and many of them, along with Europeans, will be licking their financial wounds instead of spending through much of this decade? Professional investors are turning to emerging-market stocks and funds that invest in fast-growing areas of Asia, Latin America, and Africa. While emerging stocks historically have crashed more than U.S. stocks during financial stress, recently they've seemed more resilient. Analysts say they will grow faster than the lethargic equities investors will find in the United States, Europe, and Japan. Emerging countries make up 37 percent of the globe's gross domestic product. Goldman Sachs Group Inc. recently estimated that as countries such as China, India, and Brazil continue their growth spurts, today's emerging economies will make up 49 percent of global GDP by 2020 and 59 percent by 2030. Although investors have turned their backs on U.S. stocks this year, "the cult of equity appears to be alive and well in emerging markets," said Citigroup Inc. analyst Geoffrey Dennis. This year's flows into global emerging-market funds have totaled about $40 billion, with gains of about 6 percent, compared with 3 percent in the Standard & Poor's 500 index. Turnabout from 1999 That is a change from 1999, when investors put $300 billion into U.S. stock funds and just $5 billion into emerging markets after the Asian financial crisis of 1997-98. Now, the case for emerging markets has been bolstered by analysts such as Goldman Sachs strategist David Kostin, who recently urged professional money managers to invest more outside developed countries. He expects the market value of emerging markets to climb to $80 trillion from $14 trillion over the next 20 years, while developed markets increase to $66 trillion from $30 trillion. By 2030, he said, the market value of China stocks will reach $41 trillion, exceeding the projected $34 trillion in the United States. GDP growth of emerging-market economies is likely to be twice the 4 percent growth rate in developed countries, he said. Recently, the U.S. economy has been expanding about 1.5 percent. IHS Global Insight Inc. estimates the Asia-Pacific region is expanding at 6.5 percent, though that will likely slow to 4.9 percent next year. The fate of emerging markets cannot be separated entirely from the United States and Europe because developed countries are big customers for products and natural resources. In 2008, as the United States struggled and stocks plunged 38 percent, emerging markets lost export opportunities, and stocks dropped about 50 percent. Still, UBS AG analyst Jonathan Anderson argues that the growth rate of emerging nations has been and will be about 4 percentage points stronger than that of mature countries. What to do about it? The question for investors seeking emerging-market growth is how to partake. Some analysts argue that investing in an emerging-market fund is somewhat counterproductive because large firms depend on the United States and other developed nations to be huge customers. So they argue that buying shares in a large U.S. company that sells a lot in emerging economies can make sense. "The U.S. is very much in malaise," said Eric Schoenstein, manager of the Jensen Fund. He recently added exposure in his U.S. mutual fund to large firms like Colgate-Palmolive Co. and Coca-Cola Co. that produce consumer goods and equipment for infrastructure construction, seeking companies that do a third to a half of their business in the emerging world. David Semple, director of international equity for Van Eck Global, suggests the most direct approach: Invest in small companies based in emerging markets that cater to local customers rather than selling to the United States and other developed countries. Those interested in this approach can pick emerging-market small-company funds. They can examine the funds at www.morningstar.com/. -------------------------------------------------------------------------------- Gail MarksJarvis is a personal-finance columnist for the Chicago Tribune. E-mail her at gmarksjarvis@tribune.com. Read more: philly.com Watch sports videos you won't find anywhere else

To: TobagoJack who wrote (66794)	10/3/2010 10:56:52 AM
From: KyrosL	Read Replies (3) \| Respond to of 217699

Yes, there is lots of Chinese activity in Greece, not big investments but lots of low level retail etc. In the street of my family house in Athens there are two Chinese clothing stores within walking distance. They are staffed by young Chinese men and women who speak Greek pretty well.