If You Are Attracted To Brazil, Buy EWZ

I happen to like Brazil and find many similiarities to an earlier time in the USA. Immense natural resources, export and internal consumption opportunities, population growth, and an expanding middle class. The government is stable, debt manageable, and the future bright. President Lula doesn't appear to be a total socialist.

EWZ is an ETF that tracks the Brazilian stock market. It had an amazing 2009. It has fallen like a rock the past several weeks as speculators have fled riskier assets, i.e. commodities and emerging markets.

If one's investment time horizon is longer than a couple of days, EWZ has merit. At present pricing, it has a distribution yield of about 4%. It is an income play as well as an emerging market bet. The 4ish percent distribution evolves from the portfolio composition. About 60% of the portfolio is invested in preferred stocks. These yielders not only throw off dividends, but are higher up the priority ladder should Brazilian companies start to falter.

The stock price may decrease further from here, but you get 4 percent to wait for Brazil to prosper. And prosper it will. There's too much oil, agriculture, steel, and consuming citizens to avoid growth. Yesterday was the best day in quite awhile to buy Brazil, today wouldn't be bad either. Expect it to go down, be happy if it doesn't, enjoy the distribution, and reap the benefits down the road. In the mean time sit back and enjoy the precision flag twirling half-time show on Brazilian soccer.