Brazilian Growth

I've been obsessed with Brazil and its economy. Finance media regards Brazil as an "emerging" market. I tend to disagree with that assessment. I'm starting to view Brazil as a stable and growing market versus an emerging market. Right now I'd rather money in Brazil than Greece or Ireland. Brazil striving to become a world class economy. Greece is struggling to stay afloat. China is a hot economy trying not to overheat.

Brazil obviously isn't without risk. When I describe it as stable, that term is still relative. Poverty and crime still are a major problem. No matter what you think, those issues affect the economy.

I have no clue about government regulation and oversight of financial markets.

Then there are risks inherent in investing such as human nature and greed, bad management and taking on to much debt and flat out business failure.

However as a growing economy Brazil represents a unique opportunity to profit in a country's growth and future. Over the next year or two I plan on investing in a three or four Brazilian companies as well as a broad market fund.

These investments will be gradual and in addition to my usual investing objectives. I view the Brazil opportunity as chance to augment my portfolio but not my primary investing concentration.

The iShares Brazil fund I talked about in my last post will probably be my first investment. While a broad index fund is a good way to get money on the table, individual stocks can increase profit potential. Keep in mind that individual stocks also increases risk.

So far I have four candidate companies from the the Motley Fool article "Follow Landers Into Brazil." The article features four companies I will use as jumping off points for research: Petrobras, Itua UniBanco, Vale and Banco Bradesco.

The choices I make will become part of the official ThunderCougarFalconBird Fund.

Also on my previous post, I indicated interest in an iShares high yield bond fund. It may or may not be what I was looking for. After reading the prospectus I'm not entirely clear if it is a junk bond fund. It probably is but of course the literature won't refer to it as such. Thus the term "high yield" because junk bond investors require a higher interest for the risk.

All Is Quiet

Right now I'm on the grand voyage of looking for a home. As such, my investing has slowed down as I prepare for purchase of the house.

I finally closed out my portfolio portion of shipping company Seaspan. Other than that I've let the research go to the way side for now. Not smart but house buying and summer fun have gotten in the way.

Until now I've dealt exclusively in buying stocks long. No shorts, options, mutual, ETFs or bonds have entered the portfolio.

I'm about to add a new product to my fund. I'm going to research a Brazil broad market fund. I'm also going to attempt to dabble a small part of my portfolio in a junk bond fund.

My portfolio is humming along very well despite the gloom and doom of the mass media. I adhere to the Motley Fool philosophy is you can make money regardless of the market. The key is to find well run companies, return cash to investors and have a history of good shareholder relations. It helps that management owns a good size of stock to align their wealth with mine.

So why the change? It's not really a change. My overall investing thesis remains. I decided to branch of for exposure to different risk. Most my exposure to foreign markets is through the international portion of my 401. I decided country specific gets me more targeted returns but it comes at a higher risk. As for junk bonds, it's just a risk I'm willing to take for some higher yields as well as capital appreciation since it is a traded fund.

For disclosure purposes the funds I'm researching are the iShares MSCI Brazil Index Fund (EWF) and iShares iBoxx $ High Yield Corporate Bond Fund (HYG). Actually I'm not sure High Yield is junk bonds but it's worth a look.

I should have a decision sometime next week.