Growth for 2012 and beyond is Emerging Markets and particularly, CHINA ! With the developed world fighting hard to stave off recesson, the only real economic growth is in the emerging markets. With global stocks trading with a correlation of .89 , its been very difficult to have a portfolio that is not affected by the European banking crisis. Chinese stocks are off 25% this year , setting up (what I believe) is a great buying opportunity. I met with the number one investment guy at TD Bank last month. His name is Satish Rai, and he is responsible for over $10 Billion in assets. His belief is that China can continue to grow at 3 times the US growth rate. So, if expectations are for GDP growth at 2% next year, then China's GDP would be approximately 6%. So, yes, a slower developed world does translate into slower growth in the emerging markets , however, 6% growth is still solid growth. In additon, Mr. Rai believes (as do I) that we are only half way through our bull market in commodities. He illustrated that 30% corrections in commodity prices are "normal" for a correction in a bull market. As most of you are aware, we have seen this type of correction in GOLD, SILVER, COPPER and OIL. So why are commodities a great buy at these lower prices ? Quite simply.......CHINA. For Canadians, commodities are the best way to invest in the China growth story. China accounts for the bulk of the commodity growth in the world : From the article listed below, China (from 2002- 2005) accounted for 48% of the increased demand for aluminum, 51% for Copper, 110% for lead, 87% fro Nickel, 54% for Steel, and 30% (and climbing) for Oil. It is estimated, for example, by the International Energy Agency (in their report released last week "World Energy Outlook", that global energy demand will increase by one-third from 2010 - 2035, with China and India accounting for 50% of this growth: "The dynamics of energy markets are increasingly determined by countries outside the OECD (developed nations). Non-OECD (emerging markets) account for 90% of population growth, 70% of the increase in economic output and 90% of energy demand growth over the period of 2010 - 2035. " Bottom line: The outlook for commodities is excellent. Investors should use these weaker prices to add to their commodity exposure. Buy FOOD, OIL and PRECIOUS metals in particular. Kind regards, Mike P.S. China is the key to the commodities market article: http://www.moneyweek.com/investments/commodities/china-is-the-key-to-the-commodities-market
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