China plans to focus its economy on domestic consumers; that's probably a good tactic for investors, too. Here are 9 stocks (you may not have heard of) to help.
By Jim JubakAt the end of October, China's Communist Party formally endorsed the country's new, 12th five-year economic plan. For 2011-2015 the plan envisions changing China from the world's factory to the world's market. During this period, China's leaders intend to change the economy from one driven by exports to one focused on domestic consumers.
I think investors should pursue something like that transformation in their stock portfolios. Most investors who have put money into the world's emerging economies have bought the big export companies in those economies: a Vale (VALE, news, msgs) or Petrobras (PBR, news, msgs) in Brazil, an Infosys (INFY, news, msgs) or Coal India in India, a Petrochina (PTR, news, msgs) or Lenovo Group (LNVGY, news, msgs) in China. Even investors who don't own these companies have likely heard of them.But I think it's time to develop your own five-year plan that shifts some of the money in your portfolio that you've allocated to overseas equities from export-driven companies to companies that focus on consumers within Brazil or India or China or . . . .
You don't need to abandon those exporting powerhouses all at once, or even at all. But you do need to rebalance your portfolio to include more companies that focus on domestic growth.
Let me give you the two reasons for undertaking this rebalancing. And then give you a short list of stocks that you should consider as potential tools for that rebalancing.
Reason No. 1: Beat the bubble
First, if you're worried that the aggressive monetary growth coming from the Federal Reserve and China is inflating a new bubble that could burst as early as 2011, you should add domestic-focused emerging-market stocks to your portfolio.
Wednesday, November 24, 2010
How to invest in emerging markets now
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