Investment Articles

Investments can help to ensure your financial security and your financial independence. However, there is more to it than just putting money into an account. Listed below are seven tips to help you save money when investing, and to make sure you don’t make a bad investment that costs you and your family money.

Tip 1: You don’t need a full time share broker: You are more interested in your money than anyone else. Don’t pay monthly fees to anyone. Instead research things yourself, or obtain advice from an independent financial advisor. The internet now offers some great sites and programmes for playing the share market.

Tip 2: Don’t get too greedy when investing: Warren Buffett is famous for saying “I have made a fortune from buying late and selling early”. The strategy should be to make smaller and safer profits consistently. It’s tempting to hang in there and extract the maximum profit, but slow and surely will make you get better returns in the long run.

Tip 3: Invest consistently: If you put a consistent amount into the market each month, the small ups and down shouldn’t bother you.

Tip 4: Invest wisely: Look at what is going on around you, not just what charts or brokers are saying. For example, if gold is high, look at mining companies that will make more money off gold being high.

Tip 5: Invest in Bonds: Bond owners don’t have to pay any federal tax…just make sure that the Bond you invest in looks like a good investment to begin with. Like don’t invest in Greek bonds right now.

Tip 6: Share Trading: There are hundreds of sites on the Internet that offer cheap, or in some cases free, trades. Have a look around and see if you can find one that suits your needs. We generally, use ones that are related directly to major banking institutions.

Tip 7: Invest in indexed funds: These are a relatively cheap and safe way to invest. And a good starting point if you are looking for consistent returns.
So there you have it. Seven tips to help you save money, and not lose money when investing. They have worked for us and will work for you.

Rusty is an affiliate marketer with eight years experience. His areas of expertise include SEO, articles, ezines, blogs and PPC. Rusty is particularly interested in the areas of goal setting, time management and financial and money management. Rusty is married with three young children, is an Australian national and currently lives as an expat in the Middle East. If you want to check out all his money saving tips visit http://www.1000moneysavingtips.com or http://www.1011moneysavingtipsebook.com

Value investing is an approach, a style of investing. It is not a set of formulas that allows you to beat the market. Value investors, like Warren Buffett, are prudent in their approach looking for good investments at a reduced price.

Value investors believe they are buying a business. If you went into business for yourself, you would look at many options and select the one that had the best prospects at a reasonable price. No sense committing your hard earned money to something that costs too much.

How do you know you would be a good value investor? Ask yourself if any of these characteristics describe you.

I’m business oriented. Do you like to understand how a business works? Can you describe to your better half why this company is the best one to place you money, and do you believe yourself when you explain it?

I love hunting for bargains. Do you check out the price at several stores before making a purchase? When shopping for a hotel, do you look for what kind of deals you can get before making a reservation? If you compare the price on anything you buy, you might be value investor.

I like crunching numbers. You like the simple math that explains the fundamentals of the business. You want to compare the numbers of the companies you like to see the ones that offer the best opportunity. This does not mean you are mathematician, just someone who recognizes that the numbers tell the story.

I prefer to factor in a margin of safety. When you received your first credit card, you avoided carrying it for more than a year. The car you buy is rated the safest around. When you buy a stock you want to be sure it is at a low point.

I trust myself. While analyst reports are nice and can help to identify opportunities, you prefer to make up your own mind because you know analysts can have their own agenda. You like to gain a level of comfort that whatever you buy is the best possible option out there. The same applies to the companies you consider for investment.

I don’t mind going against the grain. From experience, you find it is better not to follow the latest popular thing. Being a contrarian means you look for what is not in vogue now, but offers significant value. You know that it’s unlikely the popular stocks are bargains.

I like to put together checklists. You find yourself making lists to be sure you get all that needs to be done accomplished. Checklists make your life easier. Value investors like to follow a checklist when they review a company. While a company may not match up perfectly on each item, you go through the process to help make the best decision with the available information.

I can patiently wait for the best opportunity. You don’t mind waiting for the best opportunity to show itself. That doesn’t mean you sit around watching TV, hoping a great investment falls into your lap. You are out actively looking for what you want. You just do not jump at the first potential opportunity that comes along. Value investors work hard while they wait for the right company to arrive at the right price. Once it does, they pounce. Then they are patient for the opportunity to bear fruit. However, if the market and the company proves their analysis wrong, they implement their pre-existing exit strategy and get out of the deal.

Good value investors tend to have most, if not all of these traits. If several of these characteristics fit you then you are ready to be a value investor. To take the next step toward becoming a value hunter, read more InvestingAnswers articles on the topic, including 12 Great Companies at Fire-Sale Prices or Demystifying Value Investing: Answers to Your Top 4 Questions.

Hans Wagner
– Contributor, http://www.InvestingAnswers.com

With the recent downturn of the economy, there are a lot of people wondering what they should invest in. It seems like every day the market is sinking lower and lower and the possibilities for making decent returns on almost any investment are low. The reality is there are a few investments that are known to be countercyclical. This means that when the market goes down in value they tend to go up. This article will discuss some of the most popular countercyclical investments.

First there is gold. This is an age old investment and is used as a way of diversifying many investment portfolios. The reason that gold tends to go up in price during bad economic times is because it was once used as a standard for the monetary system. In the olden days a dollar used to be worth a certain amount of gold and so people generally thought of gold as an equivalent to cash. While the nation is no longer on this gold system many people still believe it to be a good safe haven for their money during a down turn. This demand for gold during a recession is the primary reason for its increase in value in hard times.

Another good investment during a recession is bonds. Bond values fluctuate with the interest rate, and when interest rates are lowered bonds become more valuable. Whenever there is a recession the government will lower the interest rate to try and get banks lending pumping money into the economy. When this happens bonds increase in value and are an excellent investment.

Ross Metals ( http://www.rossmetals.com/magento/ ) is the world’s gold refinery and source for the professional jeweler.

Many people buy collectibles, ranging from baseball cards and stamp collections to antique furniture and artwork. These items may have great sentimental value and cultural appeal. However, we’re not sure that you should consider these primarily as good investments. Here are some reasons to stay away from collectibles when choosing your investments.

There are significant markups when you purchase a collectible. A dealer may sell you an item for twice what he paid for it. Sometimes the dealer himself is a middleman, so the markup could have been even greater than this. In addition, you may have to cover other expenses such as appraisals, long-term storage, and possibly insurance to protect your collectible in case of damage or loss. Some of these latter fees may have to continue annually for as long as you own the item.

You have to be very knowledgeable about what you’re purchasing. Let’s face it, there are many dishonest people in the world, and you could get stuck with a low value item or even a forgery. Even if the dealer is honest, you may simply be purchasing an item which has some imperfections that you weren’t aware of (such as damage of some sort). Even if the item didn’t have any problems when you purchased it, it can suffer significant damage over time. The temperature, both inside and outside, and many others factors can contribute to the deterioration of your collectible.

The return on investment can be quite disappointing. Let’s assume all of the other items we’ve mentioned don’t discourage you from purchasing a collectible as a so-called investment. You are unlikely to earn returns comparable with the stock market, real estate, or investing in small business. You may even be hard-pressed to keep up with inflation. Hitting a homerun with collectibles (like finding a Nolan Ryan rookie card in mint condition at a garage sale) is rare, and even more reasonable returns would probably require you to anticipate the latest collectible (like the beanie babies or cabbage patch kids) craze well in advance.

If you want to purchase these items as collectibles, that’s perfectly fine. But we don’t recommend that you purchase these as serious investments which you expect to go up in value.

Joshua is an avid researcher and enjoys writing about many topics, including health and fitness, real estate, business, and investing. Please visit his site for more information on remote dog collar at http://vibratingdogcollar.org today.

What about gold as an investment?

Many people think about buying gold by the ounce, which is out of reach for a lot of people in today’s market. But what about buying gold by the gram?

A gram is about 1/31 of an ounce and is a lot more affordable for many people.

A company has been delving into this idea and is currently beginning to go worldwide with this concept.

Gold is place in small one gram gold bars on a small credit card size card. It can be taken to a jeweler and verified that…yes…this is real gold.

Not only is it real gold, but it is.999 pure gold, 24K gold, trans-actionable gold.

Currencies are currently losing their value around the world. World economies are linked to each other, and as one goes into a tailspin, it is affecting the others.

The dollar has lost 40% of its value in the last nine years. 4,000 currencies have crashed since the beginning of time. Gold has held its value for 2,000 years.

Gold is unique in today’s economy. It is the one item, which if you purchase it today, there is a good chance it will be worth more tomorrow.

There is no other item on the planet like gold. Any other item which you purchase, you will either use up, or it will begin to depreciate.

If you have not thought about investing in gold, now is the time. A company is posed to take advantage of the failing currencies of the world with a gold-backed savings plan. Consider putting some of your portfolio in gold, it is historically a good investment.

Cheryl Jones has been studying the history of money and gold vs the fiat money of the Federal Reserve system. She is currently involved in bringing affordable gold to the masses. http://buyonegramgoldbars.com

One of the most common questions I get from the participants in my monthly tax and wealth coaching teleconferences is, “Is XYZ a good investment?”

XYZ may be storage units, gold, international funds, mobile homes, businesses, commercial real estate, you name it.

The answer I give to each participant is the same. It depends.

It depends on your personal wealth strategy.

The Magic of a Wealth Strategy

The magic of creating a personal wealth strategy is that you can answer all of your own investment questions simply by referring to your strategy.

When developing a wealth strategy, there are several key questions to answer so you can answer the question, “Is XYZ a good investment?” I’ll share 2 of these questions right now.

Question #1:

What are your personal preferences?

Different types of assets have different types of characteristics. A successful wealth strategy is able to match the characteristics of a particular asset to your personal preferences.

Is your preference High, Medium or Low when it comes to certain investment characteristics? Here are a few personal preferences to consider:

Rate of return
Cash flow
Interaction with other people
Tax advantages

Once you have identified your personal preferences, you can begin to navigate through the specific type of asset to focus on.

For example, if you have a high preference to interact with others, then you can weed out assets that do not have this characteristic. The more personal preferences you can identify, the more you can narrow down the choice of assets that best match your preferences.

What is your investment criteria?

Once you have identified an asset, you are still left with an overwhelming number of options.

For example, let’s say you’ve selected commercial rental real estate as your asset. There are thousands of investment opportunities with commercial rental real estate!

How do you narrow down these options? By quantifying your preferences.

For example, you may have a preference for a high rate of return and quantify it as expecting to earn at least a 20% return on your investment. And if you have a low preference for cash flow, then you may set your cash flow criteria as $0.

How do you set these numbers?

The numbers need to work with your wealth goals. This means you need to run the numbers. If you apply the numbers to where you are today, do you get to where you want to be? If you don’t, then your numbers need to change.

The end result is a specific set of criteria that an investment opportunity must meet in order to investigate it further.

Using the example criteria above, if an investment opportunity has a rate of return of 15% and cash flow of $1,000, you will pass on it because it does not meet ALL of your criteria.

It also means if an investment opportunity has a rate of return of 50% and negative cash flow, you will pass it up because it does not meet ALL of your criteria.

Taking the time to select your asset type and set the investment criteria for that asset is often a huge time saver. Imagine being able to sort through 100 investments in just a matter of minutes to find the 5 investments that meet your criteria. Plus, you can now focus your time on doing your due diligence on just those investments that meet your criteria. This is a powerful system!

Is This a Good Investment?

So, getting back to the original question – Is this a good investment? The answer: It depends. It depends on if it meets your investment criteria. If it does, then pursue it.

Warning! Most investment mistakes come from not following a well thought out wealth strategy. I know several people right now who are struggling with their financial situation. Why? When I look at what they have done, it is clear that they did their investing without a clear strategy. Or, they had a strategy and deviated from it.

The magic of creating a personal wealth strategy is that you can answer all of your own investment questions simply by referring to your strategy.

http://www.ProVisionWealth.com

This article takes a comprehensive survey of those investment risks that, as an investment advisor, I manage on an ongoing basis for my clients across the Greater Toronto Area.

Managing the 10 most prevalent investment risks:

Time Horizon – the amount of time you can spare to have your money tied up in an investment. Investment mismatch is where money that is earmarked for the short term is invested in a long term strategy and vice versa. The riskiest type of mismatch is where money is being saved for the very long term, 20 years or longer, and the portfolio is invested in short term investment strategies. This approach is a two for one deal, as it will eventually also expose you to another investment risk, inflation.

Inflation – when things get more expensive over time. Inflation can be the biggest silent destroyer of wealth over the long term. In Canada, our average annual rate of inflation has been 3.2% since 1914. This means that over a period of 22 years Canadian money can lose 50% of its original value due to inflation. Imagine saving for 30 years only to find that your purchasing power diminished much more drastically than you expected by the time you were ready for retirement. On the other hand, a reasonable amount of inflation gives rise to the increase in value of hard assets such as property, equity shares and some commodities. Investing in these harder assets helps to manage exposure to inflation, over the long term. Incorporating such assets into your investment strategy involves balancing financial planning requirements with tolerance for investment risk.

Interest Rates – the amount of interest you receive for lending money. Receiving interest income can be an important part of your investment strategy. But beware! Interest rates are a constant moving target that can erode the market value of your bonds, similarly to the equity market. In order to manage interest rate risk, bond portfolios must be properly constructed by diversifying within the various characteristics of all available bonds appropriate for consideration.

Liquidity – the ability to cash out of your investment anytime, easily and at a fair price. It’s hard to sell something when nobody wants to buy it. Worse is when there are enough distressed sellers in a market at any one time that they can drive prices down, farther and farther. In order to effectively manage investment risk involved with liquidity, I recommend diversifying investment portfolio holdings and never putting all your money into one single asset class.

Recessions – when the economy sucks! Recessions are a natural part of the economy. They can be very tough on people, I agree, but as investors they can present us with good buying opportunities and prepare us for the eventual spring or economic recovery. Opportunities to manage this risk present themselves, in part, because different countries can be at different points of the economic cycle at the same time and certain industries and sectors can experience a business cycle of their own. In basic terms, not everything gets flushed down the toilet at the same time.

Dominating Trends – when things don’t change over a long period of time. Underneath the general economic climate lies the main dominating trend of an economy or even a specific industry. This dominating trend, despite its ups and downs, generally leans in one direction over the long term. As an example, at one time the Japanese stock market was the darling of the investment world. In 1990, its dominant trend shifted downward. Investors who bought at the peak of the Japanese market in 1990, and held on to their investments, were still underwater 20 years later. Even though there were periods of growth along the way, the stock market failed to reach new heights. Typical investors that made money in this market were those that went counter to the traditional buy and hold investment strategy.

Volatility – the degree to which the value of your stocks bounces up and down. There is a direct relationship between the uncertainty of an economic climate and the volatility of certain investments. But, volatility is not necessarily an investment risk, in and of itself. For instance, if an investment doubled your money over a 6 year period, you might conclude that it was a great investment and not so risky after all. If, on the other hand, that 6 year period was so volatile that you had, not one but, several meltdowns, would you still agree that it was a good investment? In this example, the investment risk is about whether we will stomach the roller coaster ride or end up cashing in our chips before the time is up. Volatility leads to emotional investing, even for the hard core investors. Good portfolio construction manages volatility, as an investment risk. It strives to give investors a pleasant ride without sacrificing returns.

Bear Markets – when prices in the stock market have been hammered and everything looks gloomy. Bear market is actually an industry term. It’s when the stock market goes into a funk after a good long run. Bear markets can be short and shallow, or they can be long and deep. It’s difficult to predict the exact beginning or end of a bear market, but once you are in the bears’ den, running from the bear (selling low) is rarely a good strategy. Getting defensive helps to manage investment risk and prepare cash and investments for the eventual end of the bear market.

Bull Markets – when prices in the stock market keep going up and everybody is happy. Yes, believe it or not bull market is also an industry term. It’s the opposite of a bear market. The investment risk involved with a bull market is that it can make investors (and advisors) feel overconfident, thinking that easy money can be made without exposure to investment risk. Knowing when the bull market is about to end is also tricky. Finding newer and younger bull markets is, generally, the best way to manage investment risk when a mature bull market runs its eventual course.

Impatience – the restless feeling one gets when their investment isn’t going up fast enough and they sell too early. I cannot tell you how hard this investment risk is to overcome. It just is. If all the dots have been connected and nothing has changed to make an investment turn bad, then sometimes the best approach is to be patient and wait for the price to go back up.

Susan Mallin works with MGI Securities as a Toronto-based investment advisor. As an investment advisor at MGI Securities, Susan is able to offer clients a full suite of investment services and investment products. Her process was designed to guide clients through a sea of choices in order to help them make decisions, in a manner that is simple yet effective, throughout the journey of reaching their financial goals. Susan’s investment practice isn’t focused on account size or age. It’s about desire, attitude and willingness to succeed.

Copyright Susan Mallin. All rights reserved. You may reprint this article as long as you leave all of the links active, do not edit the article and give the author credit.

This article takes a comprehensive survey of those investment risks that, as an investment advisor, I manage on an ongoing basis for my clients across the Greater Toronto Area.

Managing the 10 most prevalent investment risks:

Time Horizon – the amount of time you can spare to have your money tied up in an investment. Investment mismatch is where money that is earmarked for the short term is invested in a long term strategy and vice versa. The riskiest type of mismatch is where money is being saved for the very long term, 20 years or longer, and the portfolio is invested in short term investment strategies. This approach is a two for one deal, as it will eventually also expose you to another investment risk, inflation.

Inflation – when things get more expensive over time. Inflation can be the biggest silent destroyer of wealth over the long term. In Canada, our average annual rate of inflation has been 3.2% since 1914. This means that over a period of 22 years Canadian money can lose 50% of its original value due to inflation. Imagine saving for 30 years only to find that your purchasing power diminished much more drastically than you expected by the time you were ready for retirement. On the other hand, a reasonable amount of inflation gives rise to the increase in value of hard assets such as property, equity shares and some commodities. Investing in these harder assets helps to manage exposure to inflation, over the long term. Incorporating such assets into your investment strategy involves balancing financial planning requirements with tolerance for investment risk.

Interest Rates – the amount of interest you receive for lending money. Receiving interest income can be an important part of your investment strategy. But beware! Interest rates are a constant moving target that can erode the market value of your bonds, similarly to the equity market. In order to manage interest rate risk, bond portfolios must be properly constructed by diversifying within the various characteristics of all available bonds appropriate for consideration.

Liquidity – the ability to cash out of your investment anytime, easily and at a fair price. It’s hard to sell something when nobody wants to buy it. Worse is when there are enough distressed sellers in a market at any one time that they can drive prices down, farther and farther. In order to effectively manage investment risk involved with liquidity, I recommend diversifying investment portfolio holdings and never putting all your money into one single asset class.

Recessions – when the economy sucks! Recessions are a natural part of the economy. They can be very tough on people, I agree, but as investors they can present us with good buying opportunities and prepare us for the eventual spring or economic recovery. Opportunities to manage this risk present themselves, in part, because different countries can be at different points of the economic cycle at the same time and certain industries and sectors can experience a business cycle of their own. In basic terms, not everything gets flushed down the toilet at the same time.

Dominating Trends – when things don’t change over a long period of time. Underneath the general economic climate lies the main dominating trend of an economy or even a specific industry. This dominating trend, despite its ups and downs, generally leans in one direction over the long term. As an example, at one time the Japanese stock market was the darling of the investment world. In 1990, its dominant trend shifted downward. Investors who bought at the peak of the Japanese market in 1990, and held on to their investments, were still underwater 20 years later. Even though there were periods of growth along the way, the stock market failed to reach new heights. Typical investors that made money in this market were those that went counter to the traditional buy and hold investment strategy.

Volatility – the degree to which the value of your stocks bounces up and down. There is a direct relationship between the uncertainty of an economic climate and the volatility of certain investments. But, volatility is not necessarily an investment risk, in and of itself. For instance, if an investment doubled your money over a 6 year period, you might conclude that it was a great investment and not so risky after all. If, on the other hand, that 6 year period was so volatile that you had, not one but, several meltdowns, would you still agree that it was a good investment? In this example, the investment risk is about whether we will stomach the roller coaster ride or end up cashing in our chips before the time is up. Volatility leads to emotional investing, even for the hard core investors. Good portfolio construction manages volatility, as an investment risk. It strives to give investors a pleasant ride without sacrificing returns.

Bear Markets – when prices in the stock market have been hammered and everything looks gloomy. Bear market is actually an industry term. It’s when the stock market goes into a funk after a good long run. Bear markets can be short and shallow, or they can be long and deep. It’s difficult to predict the exact beginning or end of a bear market, but once you are in the bears’ den, running from the bear (selling low) is rarely a good strategy. Getting defensive helps to manage investment risk and prepare cash and investments for the eventual end of the bear market.

Bull Markets – when prices in the stock market keep going up and everybody is happy. Yes, believe it or not bull market is also an industry term. It’s the opposite of a bear market. The investment risk involved with a bull market is that it can make investors (and advisors) feel overconfident, thinking that easy money can be made without exposure to investment risk. Knowing when the bull market is about to end is also tricky. Finding newer and younger bull markets is, generally, the best way to manage investment risk when a mature bull market runs its eventual course.

Impatience – the restless feeling one gets when their investment isn’t going up fast enough and they sell too early. I cannot tell you how hard this investment risk is to overcome. It just is. If all the dots have been connected and nothing has changed to make an investment turn bad, then sometimes the best approach is to be patient and wait for the price to go back up.

Susan Mallin works with MGI Securities as a Toronto-based investment advisor. As an investment advisor at MGI Securities, Susan is able to offer clients a full suite of investment services and investment products. Her process was designed to guide clients through a sea of choices in order to help them make decisions, in a manner that is simple yet effective, throughout the journey of reaching their financial goals. Susan’s investment practice isn’t focused on account size or age. It’s about desire, attitude and willingness to succeed.

Copyright Susan Mallin. All rights reserved. You may reprint this article as long as you leave all of the links active, do not edit the article and give the author credit.

Last month, my friend, who is a young software engineer in his early 30’s decided to start investing. I thought all my lectures to him regarding compounding effect and early investment benefits paid off. But, fate had it that he went to a private bank for opening a FD and returned home with a ULIP policy. Realizing this fact I did a further inquiry and found all agents of Indian private banks are discouraging their prospects from buying fixed deposits and persuading them to go for ULIPs. Further, they claim that it’s a three year investment with free insurance of — amount and assured returns on endowment. This month, even after all the fights between SEBI and IRDA, nothing has really changed in this business. Bank agents still keep singing about USPs of ULIPs as investment proposal.

Here’s what those agents won’t tell you:
•ULIP is not an investment but an insurance plan coupled with a few market benefits.
•ULIP is a very focused instrument for a very specific need, its not supposed to be treated as a high return alternative to bank FDs. In fact it is not even an investment instrument.
•There are no assured returns in ULIPs.
•It is much riskier than the underlying investments, as, even if the underlying investments give negative returns, the banks still deduce all administrative charges.
•Coupling the above fact with the current slowdown period, many investors’ returns reached -100% i.e. their policy became null and void.
•Most of the ULIP premium paid in first three years is consumed in administrative costs like agent commissions, fund manager fees, insurance premiums and other fixed costs. As the agent cannot receive any commission after these three years, they claim that ULIP is for fixed period of three years.

So, ULIP is NOT suitable for you if:
•You are in very early stages of your career and don’t have many financial burdens
•You already have a good insurance plan either individual or through your employer
•Your only need is good returns of your hard earned money
•You don’t want to couple your investments to market risk
•You have the time and understanding to invest in stock markets and make money
•Your investment needs are less than 10 years
•You have some huge and predictable expenses in the next three to five years

Unfortunately my friend got hit through most of the above points as his age is 25, works for a MNC offering insurance benefits and will be marrying in the next 2-3 years. In fact most of the people get hit in at least one of the above points. ULIP is neither a good investment instrument nor an efficient insurance policy as it can neither match the returns of other market based instruments nor can it be so versatile like modern insurance covers. It is designed to deceive the innocent customers.

-PS the author is part of the Indian stock picking community and can be reached at sunny@moneyvidya.com or http://www.moneyvidya.com

Sunny Talreja, part of Indian Stock Picking Community, Moneyvidya.com

Aspen Woolf explains why Brazil will play a key role in their future.

Brazil. The place is booming: a fast-growing consumer market, investment-grade status, huge foreign reserves, surging commodity exports and agricultural productivity to rival the US. Foreign investment has tripled in a decade.

Brazil was one of the last countries to fall into recession and one of the first to return to growth. Despite global financial and economic crises the economy contracted by just 0.3% last year, while its stock market rose a staggering 83% and the real currency 33%. The IMF forecasts the economy to grow by 5.5% this year and 4.1% next year. This year will see a surge of foreign investment – $45 billion. That’s up 74% on last year.

So why is Brazil considered such a good investment? Well, last year, Brazil became a middle class country. The new middle classes are now consumers… and they’re spending. For the first time in the country’s history the domestic population now has the chance and confidence to take mortgages. The current total mortgage value in Brazil represents only 2% of the GDP. To put it into perspective, the same number in the UK is a whopping 75%. The Brazilian government now forecasts that the Brazilian mortgage market will grow 600% by 2014, reaching 12% of the GDP. All of a sudden, Brazilians are racing to buy property. Property prices are starting to see stratospheric growth, especially in the northeast. As credit continues to open up, the Brazilian consumer will be a force to be reckoned with.

Brazil is energy independent. The Tupi and Lara fields, situated 800km off the Brazilian coast, are home to America’s largest discovery of crude oil deposits since the Cantarell fields were found in Mexico in 1976. The fields in Brazil have huge potential and are estimated to hold up to 10 billion barrels of oil. The Financial Times refers to the reserves as “Brazil’s ticket to the world’s VIP energy club”.

In short, Brazil suddenly seems to have made an entrance onto the world stage. Its arrival was symbolically marked last year by the award of the 2016 Olympics to Rio de Janeiro; two years earlier, Brazil will host football’s World Cup. You should have exposure to Brazil in your portfolio.

Aspen Woolf
http://www.aspenwoolf.co.uk