Bain & Company sums it up perfectly: “China, followed by India and other emerging Asian economies, is creating a vast new population of consumers, whose growth will continue into the coming decade.” (Source: “The Great Eight: Trillion-Dollar Growth Trends to 2020,” Bain & Company web site, last accessed October 11, 2013.) Bain suggests about two-thirds of the world’s growth in the middle class will be generated from China and India, which will mean a massive boom to global consumer spending.
Growth in Latin America is estimated to come in at 3.5% this year, according to the International Monetary Fund.
One of the top regions in Latin America is Brazil (NYSEARCA:EWZ), as the country gets set to host the World Cup in 2014, followed by the Olympics in 2016. The Brazilian benchmark index (Bovespa) is up 19% from its 52-week low and is still well below its 52-week high of 63,473.
In Asia, I continue to favor massive consumer spending and growth in South Korea, which is home to several world-class companies, such as Samsung Electronics Co. Ltd., LG Corporation, and The Hyundai Motor Company.
Another area of high consumer spending that will drive economic growth is Eastern Europe, with Russia and Poland as the front-runners for growth.
The bottom line is: don’t limit yourself to investments in the American economy; you need to consider exploring the opportunities arising in the emerging markets, where the gains could be explosive. An emerging market exchange-traded fund (ETF) worth a look is the iShares MSCI Emerging Markets (NYSEARCA:EEM). If you want more leverage, take a look at the Direxion Daily Emerging Markets Bull 3x ETF (NYSEARCA:EDC).
This article is brought to you courtesy of George Leong from Investment Contrarians.