Newspaper article The Morning Bulletin (Rockhampton, Australia)

New Rising World Economies Worth the Investment

Newspaper article The Morning Bulletin (Rockhampton, Australia)

New Rising World Economies Worth the Investment

Article excerpt

David Telford

of RetireInvest

NO ONE can tell what level the S&P/ASX 200 Index or the Dow Jones Industrial Average will be in five years time. But when it comes to the big, secular themes influencing economies and global financial markets, there are plenty of opportunities and plenty of reasons for investors to take action.

If we think about the themes that will play a prominent role in the 21st century, we have the continuing rise of Asia, the rise of Africa and growing consumption and urbanisation in emerging markets. We have the aging world population, the challenge of feeding and powering the world, and climate change. And we also have changes in technology.

These changes are all visible and all present opportunities for investors; here are some things long-term investors might want to consider if they want to tap into the rewards on offer from the 21st century investment themes.

Invest more in emerging markets; beware of home bias.

Investors need to consider whether they have enough exposure to emerging markets, these appear to have more favourable long-term growth outlooks than developed countries.

Invest in frontier markets such as those in Africa.

While the growth is China is incredible, don't put all your eggs in one basket. An allocation to emerging markets best includes a range of economies at various stages of development. Consider, for instance, Indonesia, Nigeria, Mexico and Turkey. These countries have large populations and fast-growing economies and are mooted as next big things.

Invest in real assets.

The rise of emerging countries and an increase in the world's population could spur inflationary pressures.

In this case it makes sense for investors to consider inflation-protection in their portfolios, such as inflation-linked bonds or companies that have pricing power such as miners of industrial and precious metals. …

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