A Pivotal Change in Brazil
Brazil is in the early stages of a potential structural change, which has set the stage for a market-friendly investment environment. In the past few months, we have begun to see an improvement in consumer confidence, employment, and investment. Valuation multiples are still in-line with historical averages. If Brazil can move forward with the necessary reforms, firm up its fiscal deficit, and leverage the country’s tremendous advantages in natural resources and demographics, Brazilian equities could be set for an attractive multi-year re-rating.
Investment Considerations — There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including the potential of loss of principal.
Emerging Markets Risk — The risks of foreign investments are typically greater in less developed countries, which are sometimes referred to as emerging markets. For example, political, legal and economic structures in these country may be changing rapidly, which can cause instability and greater risk of loss. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluation, which could hurt their economies and securities markets. For these and other reasons, investments in emerging markets are often considered speculative. Similarly, investors are also subject to foreign securities risks including, but not limited to, the fact that foreign investments may be subject to different and in some circumstances less stringent regulatory and disclosure standards than U.S. investments.