It Could be Worse - You Could be an Estonian Investor

I had to make that clever title up due to a specific reader of the blog who has emailed me in the past, who is from Estonia of all places. :)

Below is a chart of all the world indexes returns year to date (courtesy TickerSense) - this was 2 days ago so the US index would be back in the green but overall its been a paltry year for US investors. The chart is sort of hard to read due to size so click on it and it will pop up in larger form in a new window. What is interesting is if memory serves me 2006 was the first year ever that every international index was up - talk about an amazing year. This year it is still a pretty good result worldwide, just no so much here in the US... or Estonia at @ -14.4%

Whose at the top? Shocker... China @ 135%
A lot of Eastern European countries make up the top 5; no surprise - they have been hot for years. Nigeria (oil) is also a big winner. A lot of nice winners in the middle east (petro dollars) - again nothing really surprising there either. The other 'BRIC' members were very solid - India @ 39.6%, Brazil @ 32.9% and Russia @ 13.3%. Personally I find Russia over hyped as they move away from capitalism, and over reliant on energy but hey that's working for parts of the Middle East I suppose.

Major losers? Surprisingly Ireland @ -29.9% - thats been a very hot market for a few years - good old Venezuela with more anti capitalist reforms @ -28%, and Japan @ -14.4%. This was supposed to be the year Japan finally recovered (then again it has supposedly going to be 'that year' for the past decade). The US and UK rank #64 and #66 out of 80, with essentially flat returns. For us. For foreigners who buy into our markets the returns have been gosh awful as their currency appreciates vs the dollar. In the meantime I'll get those "We're #66!" Tshirts ready.... woo hoo!

Overall the emerging markets in my opinion are the place to be for the coming decade(s), however they have had a huge run and are well overdue for a sizable correction. Perhaps this coming US recession will be the driver, and once the next serious correction is in, I think these will be some great buys for 2010+. iShares just introduced a new ETF a few weeks ago, as a matter of fact if you want all your 'BRIC' in 1 ETF... iShares MSCI Bric Index (BKF). There have been a few of these ETFs but most have concentrated too much on 1 country or another - this one has a pretty balanced approach

1. China 36.5%
2. Brazil 27.5%
3. Russia 20.5%
4. India 15.5%

While this ETF is too overdependent on energy for my liking it is a pretty simple & clean 1 stop approach. Personally I prefer BIC over BRIC (no Russia), but again... in time and at lower prices.

Now where is that iShares Estonia I've been hungering for.....