Posted: May 10, 2013
Alphabet soup investing
These are a few of my favorite financial acronymsBy Ron Phillips
There are thousands and thousands of acronyms floating around. New ones are cooked up on a daily basis. Here are a few of my favorite recipes from the investment community.
BRIC represents a group of emerging economies. They’re Brazil, Russia, India and China.
They’re popular because of the extraordinary growth they have boiled up. China has quickly become the second-largest economy. They recently steamed past both Germany’s and Japan’s GDP.
There’s a reason this blend is so popular. According to CME Group, the BRIC nations have gone from 8 percent of global GDP to 25 percent of worldwide production in 2010. China and India are estimated to be the first and third largest economies, respectively, by the year 2050. The U.S. will be sandwiched between the two.
The BRICs have several funds dedicated to them. One is the SPDR S&P BRIC 40 (symbol: BIK). It has a 2.52 percent annual yield and a small yearly expense ratio of 0.50 percent.
This lesser-known cocktail consists of Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa. CIVETS are considered the next generation of tiger economies. Being emerging markets they’re very volatile and aggressive.
Indonesia is the fourth most-populated country on the planet. A potentially good market. Turkey is a bridge between Europe and the Middle East. Both very important, and large, markets.
This meaty group has gotten a lot of press lately. Made of Portugal, Italy, Ireland, Greece and Spain, they have been tenderized by recessions, austerity measures, currency fears and more.
But remember: these economies were once hot markets with stellar growth. Ireland is still a tech hub that attracts investments. Italy and Spain are the fourth- and sixth-largest economies in Europe. There could be value here at a cheap price.
For a vegetarian choice we have CARBS. These are Canada, Australia, Russia, Brazil and South Africa. This is a unique mix, including both emerging and developed economies. All of the CARBS are large producers of commodities.
Together they have 29 percent of the global landmass and only 6 percent of the world’s population. This makes them ripe for exporting large amounts of “stuff.” These producers of stuff could be a good inflation protector.
WisdomTree Commodity Country Fund (symbol: CCXE) provides about a 60 percent exposure to these five countries, a 3.69 percent yield and reasonable expenses of 0.58 percent annually.
Congratulations! You’ve survived all of these bad food puns without getting indigestion. Take a closer look at this alphabet soup of countries. You may discover a tasty morsel.
Ron Phillips is an Independent Financial Advisor and a Pueblo, Colorado native. He and his wife are currently raising their two sons in Pueblo. Order a free copy of his book "Investing To Win" by visiting www.RetireIQ.info or leaving a message on his prerecorded voicemail at 924-5070. Simply mention Promo Code #1001 when ordering.