Investors have been dumping emerging-market stocks at a record pace. While Brazil, Russia, India, China and South Africa (collectively known as the BRICS) helped pull the world out of the financial crisis, investors have been fleeing as performance slumps. Let’s not forget we also have the geopolitical concerns and sanction in Russia; uncertainties in regard to the Chinese banking system and overall economic strength; and Brazil suffering its first credit-rating cut in a decade. My question is, could this be the time to invest? Below are few things to consider:
The World Bank Group predicts global population will reach 9.4 billion by 2050. Most of that growth will occur in the BRICS.
Per capita standard of living in BRICS countries will rise on average 36% compared to 6% here in the US. The standard of living for residents of India and China are predicted to increase the most, nearly 70% and 40%, respectively.
- India is predicted to surpass China as the most populous country in the world with approximately 1.5 billion residents by 2030 and go on to add at least another 100 million by 2050. Some estimates predict India’s population will be closer to 1.9 billion by 2050. In other words China will have more than 3x the U.S. population, and India nearly 4x.
- Over the next decade, many analyst believe the percentage increase in economic output, from greatest to least, is predicted to come from China, India, South Africa, Brazil, Russia and lastly, the United States.
To summarize, maybe we should be looking for companies and stocks that are well positioned to take advantage of the huge growth, particularly in India and China. Personally, I now have Vodafone (VOD) and a few others on my radar screen. I don’t know much about VOD except for the fact they have over 150 million mobile subscribers in India. With India’s population and standards of living forecast to soar maybe a company like Vodafone is positioned to take advantage of that??? Maybe China Mobile Limited (CHL), the world’s single largest carrier by subscriber count (with over 750 million), is something to research and consider as well. All I am saying is, as the BRICS fall out of favor by some of the larger traders, there might be some real longer-term bargains to be found. Make sure you are doing your homework!