This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Investing In Emerging Markets: 6 Mexican And South Korean Stocks

James Dennin, Kapitall: Looking to invest in emerging markets? Mexico and South Korea may outperform as the Fed begins tapering. 

Throughout the past decade or so, investors have been bullish on so-called 'emerging markets.' These investment opportunities even got their own nickname - the 'BRIC' countries. A  Goldman Sach's (GS) banker coined the term for the emerging market "sleeping giants" of Brazil, Russia, India, and China.

[Read more on Emerging Economies from Kapitall: Chinese Tech Stocks Outperforming BRIC Markets]

When financial crises in America and the Eurozone made other, growing economies more attractive, investors flocked to mutual funds and exchange traded funds (ETFs) that focused on Asia and Latin America.

Returns were high, but they were buoyed by China's ascent and high commodity prices. With Chinese development starting to slow down, analysts argue that while emerging economies still have the most room to grow, it's time to be more discriminating when making investing decisions.

As demand for goods in China declines, and the easy money policies of America's Federal Reserve start tapering off, certain economies may be better situated for growth than others. 

The trend is particularly important, because until recently emerging economies were generally lumped together as 'buys' or 'sells' without much regard for specifics. As investors pay closer attention to the data coming out of individual countries, a better market for selling bonds and currencies from these companies is likely to develop.

And some emerging economies will stand out as better equipped for the years to come. This has to do with how much a country is relying on foreign assets for investment – and what they've done with the extra liquidity stemming from American quantitative easing.

According to an analysis from Goldman's economists, two of the healthiest economies looking ahead are South Korea and Mexico.

Different reactions among currencies to the news that tapering could begin soon tells a story in and of itself. India and Indonesia's currencies fell 12% and 11% respectively. The Mexican peso declined less than half as much, and rumors that Mexico's new President Enrique Peña Nieto might relax oil nationalization have driven up optimism even further. South Korea's currency actually climbed, 3.8%. 

Investing ideas

Stock prices usually rise alongside the currency of the country that company is in. This means battered currencies will create a favorable environment for finding undervalued stocks. However, foreign investment is not likely to recover to the same levels as back when nearly everything in the four BRIC countries was deemed a good investment.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs