Mexico's a Better Bet?

It might not surprise you that the Mexican stock market, as measured by the exchange traded fund tracking the Mexican market (EWW). After all, Mexico is still considered a developing economy where stronger growth is expected. Many of us know however that Mexico's troubles are probably worse that those of the US so one might shun investing there.

I always operated under the assumption that those in Mexico would be better off changing their pesos to dollars and investing in the US. The Mexican Peso dropped some 30% against the dollar last year and with this in mind, I thought that it would be a "no-brainer" for Mexicans to keep their money up here. But surprise surprise!

Over the past three years, holding Mexican Pesos has proven to be a better strategy than investing in the SP500! Not only that, but peso accounts generally pay a much greater rate of interest than dollar investments. The Mexican Peso Exchange Traded Fund (FXM) currently offers a 3.5% dividend.

Who could have guessed???

Emerging Markets Soaring

The Latin America 40 Index (ILF)has been a top performer this year turning in a 32.9% year to date gain. ILF has soared 44% over the past 10 weeks more than making up for the year's early losses.

The MSCI Pacific (less Japan) ETF, soared 12.2% this week, helping this index ETF gain more than 18% on the year.

Basic Materials Score Big

With only a few exceptions, Basic Material stocks have rallied hard in anticipation of economic recovery.

Leading the way are oil service stocks, in particular, Transocean, Ltd., which is up nearly 60% on the year. RIG was one of our Trendsetter buy/write picks at the beginning of the year.

Weekly Table