Emerging markets provide new investment opportunities
The recession is a catalyst for investors to look at the emerging economies who were knocked back but kept on growing while the UK, Europe and the US plummeted in to recession.
The new industrial powerhouses of the world are the BRIC economies – Brazil, Russia, India and China – but the one that looks set to outstrip them all is Brazil.
Guardian Wealth Management is watching developments in Brazil closely as the announcement of the discovery of billions of barrels of offshore oil look set to change the balance of political and economic power in Latin America and beyond.
Brazil’s undersea ‘black belt’ of oil
The size of the find looks to propel Brazil from nowhere to one of the world’s top 10 oil producers with oil companies predicting reserves of more than 350 billion barrels of crude locked 6,000 feet under the sea in an 800 kilometre strip of ocean.
Brazil’s oil let’s the country stand head and shoulders above Latin American rival Venezuela, and with a more stable government than that of Venezuela’s President Chavez, devalues Venezuela’s riches as both countries race to auction oil and gas fields to the highest bidders.
The other emerging market on everyone’s lips is China, but unlike Brazil and Russia, the country is short of natural resources and is spending big to secure the raw materials needed for the economy to surge on.
India has vast manpower but little in resources. Religion and politics sometimes collide to cause problems for business. The most recent example is the demise of Indian airlines because of a three-way row between the airline industry, the national government and state governments.
The airlines are crippled by huge fuel taxes that make them uncompetitive with other international airlines but national and state politicians are locked in arguments over who is paid the tax because if they lose the money, other projects and initiatives will fail from lack of funding.
Advisors are players in an investment team
Investments, politics and economics are so intertwined and complicated that Guardian Wealth Management considers that serious investors need more than just an independent financial advisor.
The financial world moves so quick, a team of analysts; economists and investment managers back up Guardian Wealth Management’s advisors to ensure our clients receive the best and latest financial information to make well-informed decisions about risk and return.
These experts keep a close eye on the massive coal, copper and uranium finds in Mongolia and the cat-and-mouse game between the country’s BRIC neighbours Russia and China for control of the reserves.
What happens in the next decade to the BRIC countries is of global importance. Their economics and politics will dominate the world – just think they already are huge countries with governments representing a massive proportion of the world’s population.
As the people become richer as the economies grow, new markets open for selling luxury goods and services only available in more established ‘old world’ economies.
BRIC economies want to take the lead off the dollar
The other big issue for emerging market investors is currency exchange. The US dollar is the world’s reserve currency, but the BRIC economies want to change that so they are not tied in to the vagaries of exchange rate fluctuation.
China is a leading force to move the yuan away from the dollar to give the US less financial clout ion the rising industrial powers.
When looking at BRIC investment, the forces of politics, religion and economics need weighing up to arrive at a risk quotient – the ultimate decider of on a scale of 1 to 10 how much risk an investor is prepared to take for a return on putting cash in to a BRICS economy.
After deciding on the level of acceptable risk comes the question of how much to invest, and the investment vehicle
As a ‘whole of the market’ provider, Guardian Wealth Management can give unbiased, independent advice on any investment product offered by any provider – this adds up to literally hundreds of thousands of products.
The trouble with so much choice is that making sensible decisions becomes that more difficult as the pros and cons of investing between different products can often become very subtle.
That’s why Guardian Wealth Management believes that knowing the client is as important as giving advice because tailoring a personal investment strategy means a long term business relationship that benchmarks advice and has built in periodic reviews to make sure fund performance is monitored and on-track.