Investing in Emerging Economies

Investing in Emerging Economies
There has been a lot of talk about BRIC. For awhile it was said that they were not suffering from the economic downturn in the rest of the world. It is fairly obvious now that that is not the case. I have little experience in the Russia and India portion of the BRIC. I do not trust the government in Russia; so would find it hard to invest there. The only thing that scares me about China is it’s very size and the fact that is so manufacturing oriented. The rest of the world will have to recover before China can. There is also the tie to the US dollar. If the dollar goes in the tank, that will hurt the Chinese.
The countries I understand are the Latin American countries. Their economies are suffering some; but because of the use of cash and the underground economies there, they are in better shape, for the most part, than the rest of the world. The real benefit in Latin America is that the economies are small. The USA economy is like an aircraft carrier. It takes a long time to change direction or turn around. The Latin economies are like speed boats, they can spin on a dime.
I believe it is time to invest in Latin America. It is necessary to use a different model than most investors use in developed countries. The relationship between risk and yield are very important. When operating projections are made in the developed world, vacancy and credit losses are factored in. In the developing world one must also add line items for country risk and currency risk. In some cases one must consider political risk and environmental risk as well.