The fundamental basis of investing is the time value of money, and the investment that returns the most money in the shortest period of time will always be the favorite. That is why investing in emerging markets should form the foundation for all portfolios.
Europe and the United States are suffering from "lost decades" of economic growth. The United States has a slow-growing economy and trillions in debt to deal with. Meanwhile, investors in Greek sovereign debt are looking at losing 70% when Athens defaults, and Greece will not be the last European nation to fall. And then there's Japan, where the lost decade is now old enough to drink in U.S. bars.
The United States will maintain an economic growth rate of 2% if it's lucky. In Europe and Japan, "growth" will likely be negative, and all of these slow-growing nations will be grappling with high unemployment.
But in Emerging Markets...
Both China and India will grow more than 7% in 2012. The Chinese government is l oosening the money supply and and making new friends in East Africa . Asian bankers are hiring . Luxury retail is growing . New economic activity is springing up everywhere you look, no matter how unusual .
... Warren Buffett is Buying
Emerging market growth has led the recent investing of Warren Buffett, one of the most successful financiers in history . His buys of Lubrizoil, Burlington Sante Fe Railroad and massive holdings of publicly traded companies such as Coca Cola ( KO , quote ) and Kraft ( KFT , quote ) are all plays on emerging market growth.
Last year, Buffett visited India for the first time, scouting for buys for the portfolio of Berkshire Hathaway ( BRK-A , quote ). Foreign stocks owned by Buffett include Glaxo SmithKline, ( GSK , quote ), Sanofi-Aventis ( SNY , quote ) and Posco ( PKX , quote ).
The master is buying into emerging market growth, and following him is a wise move for all investors.