NEW YORK (TheStreet) -- According to projections from the International Monetary Fund, China, India and Brazil are expected to be the economic growth leaders of the year and it is possible to reap the benefits of this international growth domestically.
Over the last year, the MSCI Emerging Markets Index has gained more than 65% and prices in emerging stock markets, like China, have followed. In fact, China's main stock market index trades at a price-to-earnings ratio of more than 30, nearly 50% higher than that of the
In addition to being cheaper, domestic stocks that are likely to benefit from international growth tend to be less volatile, have less risk and are more liquid than those of emerging markets. As these nations grow and develop, demand for energy, technology and industrials will likely surge.
With this in mind, conglomerates like
, who derive nearly one-third of their revenues from emerging markets, are good choices. Additionally, energy services companies who focus on oil-services and equipment, like
, are worth a look.
Lastly, technology that enables nations to gain a competitive advantage, or at the very least, compete with developed nations, will be in demand. Some companies to watch here include
For a more diversified approach, take a look at the following ETFs:
- iShares Dow Jones US Industrials (IYJ) - Get Report allocates nearly 12% of its assets to GE. IYJ has gained nearly 56% over the past year and closed at $54.11 on Friday.
iShares Dow Jones US Oil Equipment Index (IEZ) - Get Report boasts Schlumberger and Halliburton as its top holdings. IEZ is up about 78% over the past year and closed at $44.50 on Friday.
Technology Select Sector SPDR (XLK) - Get Report boasts Microsoft, Intel and
Apple (AAPL) - Get Report as top holdings. XLK is up nearly 54% over the last year and closed at $21.82 on Friday.
When investing in equities, it is equally important to consider the inherent risks involved. To help mitigate these risks, it is important to implement an exit strategy that triggers price points at which an upward trend could potentially be coming to an end and enable one to preserve equity.
According to the latest data at
, an upward trend in the mentioned ETFs could come to an end at the following price points: IYJ at $52.66; IEZ at $42.60; XLK at $21.34. These price points change on a daily basis as market conditions fluctuate; updated data can be found at www.SmartStops.net.
Written by Kevin Grewal in Laguna Niguel, Calif.
Kevin Grewal serves as the editorial director and research analyst at The ETF Institute, which is the only independent organization providing financial professionals with certification, education, and training pertaining to exchange-traded funds (ETFs). Additionally, he serves as the editorial director at SmartStops.net where he focuses on mitigating risks and implementing exit strategies to preserve equity. Prior to this, Grewal was an analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds a bachelor's degree from the University of California along with a MBA from the California State University, Fullerton.