Brics provide a solid foundation for US investors

[madison2000]

By Stephen Schurr
Published: November 30 2004 02:00 | Last updated: November 30 2004 02:00

"Every few decades, a seismic shift occurs in the world economy that has far-reaching implications . . . the rise of the four largest emerging economies, the Brics - Brazil, Russia, India and China - could be this kind of transforming event over the next few decades." Goldman Sachs research report.

During the miraculous bull market of 1982-99, Americans' best investment strategy boiled down to a simple formula: buy American, and go away. For the next two decades, repeating this formula will have substantially negative consequences.

The rest of the world, which owns hefty portions of US stocks, bonds and dollars, is starting to question the long-cherished belief that American investments are inherently safer. US investors would be well-served giving their portfolios a closer inspection and asking themselves the same question.

We tend to shy away from investing overseas, especially in markets such as the high-flying "Bric" countries because we fear the risk and volatility. However, I offer my modest proposal: the US is a far riskier investment over the next 10 years than the Brics.

http://news.ft.com/cms/s/233685e6-4277-11d9-8e3c-00000e2511c8.html