Back in October of 2009, I wrote a blogpost about Brazil I called Blame it on Rio. I felt Brazil was a country on the rise and one worth investing in. With President Obama’s recent visit to Brazil, it’s clear we are watching this emerging economy take its rightful place on the world stage.
In 2010, Brazil’s economy grew by a blistering 7.5%, a rate unmatched since 1986. This meant that Brazil overtook Italy to rank as the world’s seventh-biggest economy. Their new President, Dilma Rousseff, is already receiving high marks for her early performance.
What gets me most excited about Brazil is their fast growing middle class. Close to 50% of the country is now considered middle class. That’s amazing, considering where they started from. Yes, there are still parts of the country with extreme poverty, but how I wish the U.S was growing our middle class as fast as Brazil’s. It’s truly inspiring to witness what’s going on in this country.
The major concern I have at the moment is the high rate of inflation in the country. My second concern is interest rates for small business loans, which is currently at an eye popping 28%. But both of these issues are being taken very seriously by the Finance Minister.
In terms of investing options for Brazil, I like the i-shares Brazil Index Fund, symbol EWZ and the Brazil Small Cap Index Fund, symbol EWZS. For exposure to a broader swath of the Latin American Market, I happen to like the i-shares Latin American Index Fund, symbol ILF.
Diversification
Before making any changes to your investment portfolio, be sure you understand your short-term financial goals as well as your long-term financial goals. The financial decisions any investor faces today are a bit daunting. But by doing your homework and having a clear understanding of the risks and rewards, your odds of success will be greatly enhanced.
You should consider i-shares funds' investment objectives, risks, and charges and expenses carefully before investing. For this and other important information, please obtain a fund prospectus at ishares.com. Please read it carefully before investing.
