Market fundamentals still indicate a very bullish 2010 forecast for selected emerging markets, which is backed up by a country by country analysis here.
For instance, recently the World Bank raised its growth forecast in China for 2010. The strength of regions like China and Latin America really was crucial to powering through the worst of this worldwide economic downturn. The collective spending power of this ever growing middle class in these emerging markets is immense and should be very profitable in 2010.
Some emerging market stocks that look really good for 2010 include American Tower (AMT), CNOOC (CEO) and even multi-national companies such as McDonalds (MCD) and Coca-Cola (KO) look like very attractive buys for 2010. There is also a very good exchange traded fund like the iShares Emerging Market Trust (EEM), which is a way to participate in the strength of some of these emerging market powerhouses without incurring some of the volatility that sometimes comes with individual issues.
Trading Tips for Taking Advantage of this Opportunity
Of course these stocks and ETFs can be purchased to capture the predicted bullish opportunity. However, one of my key trading tips is to employ options and get a far bigger bang for your buck. You can buy a bullish long-term call for far less than purchasing the underlying.
In addition, you can reduce the outlay even more by using a long-term bull call spread. By selling a further out strike call you can reduce what you had to pay for the lower strike call. Finally, if you do decide to purchase the underlying stock or ETF then consider selling a long-term out-of-the-money call to enhance your overall returns.
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