Investing in Brazil

Investing in BrazilBrazil’s manufacturing, agriculture and mining alone makes the idea of investing in Brazil an extremely smart choice. It is the 10th largest country in the world and ranked largest economically in Latin America. Their agricultural and domestic production increases every year, even when other countries decrease. Candidly speaking, Brazil has stuff that other countries need.

Brazil is the largest producer of sugar cane and exporter of ethanol and has always had key profit products like soybeans and orange juice. Newly discovered however, since the year 2000 have introduced the idea that fields there could produce billions and billions of barrels of oil which makes investing in Brazil a wise choice right now. In 2007 alone, 12 billion barrels of oil were produced making up for 1% of the entire world’s population. The Tupi field discovery has launched Brazil into the 8th position in the production of oil worldwide. PBR, the Petroleo Brasileiro SA remains one of the top stock choices for Brazil. In addition to this statistic, Brazil supplies over 40% of the world’s ethanol that is used for fuel. Domestic production is another key element of why investing in Brazil so smart. Brazil is the 4th largest cosmetic market in the world.

Brazilian Real Fund (BUFF) stocks were a solid buy before the announcement that Rio de Janeiro will host the 2016 Summer Olympics and continue to hold true to that statistic. Hosting the World Cup in 2014 and then the 2016 Summer Olympics will do great things for hotel resort stocks in Brazil as well. Orthon Hotel stocks rose 70% in the market after the Olympic announcement in 2009. The Bovespa index has surged since then and continues to grow. The World Bank has predicted Brazil’s economy will be the 5th largest in the world by 2016. The combination of the World Cup, Summer Olympics and great oil discovery alone is predicted to boost Brazil’s global recognition by 4% in the next few years. ILF, EWZ and BPF stocks continue to outperform the market.

If you plan to add Brazil to pat of your diversified portfolio, it is easiest to achieve through ETF’s such as Ishares MSCI Brazil and Wisdom Tree Dreyfus Brazilian Real Fund. Also the demand for base metals like copper and steel due to construction factors will increase so Vale S.A. which is Latin America’s largest steel maker is a good individual stock. If you are looking for individual stocks, don’t forget energy companies like Petroleo Brasileiro S.A. Whatever companies you choose for investing in Brazil, you really cannot go wrong. This country will continue to swallow the market in all areas.