WELCOME TO BRAZIL
 
Suddenly everyone is talking about Brazil. This makes sense considering that the colossus of South America out-hustled President Obama and his hometown of Chicago to land the 2016 Olympics. It has also benefited by being the "B" part of the BRIC group of emerging nations, in addition to Russia, India and China. It's an emerging power that some investors have just learned about, though the pros have been hip to it for some time.
 
From 2003 through 2007, Brazil ran record trade surpluses, and its gross domestic product, at $1.99 trillion, is the 10th largest in the world. It has large and well-developed agricultural, mining, manufacturing and service sectors, and its economy is bigger than all other nations in South America combined. Brazil is expanding its presence in world markets and, as we have seen, the world's playing fields.
 
There are also some significant drawbacks to Brazil. Despite its potent GDP, rampant income inequality means that its per capita wealth is 102nd in the world, slightly behind the global average and noted powerhouse Serbia. Brazil's richest 10% reaps 43% of its wealth; in the U.S. that number is 30%. Brazil's bottom 10% earns a minuscule 1.1%.
 
Still, there is a lot to like here, and our industry observers are ready to buy.
 
David Joy, chief market strategist for RiverSource Investments, says that the Olympics represent not just a feather in Brazil's cap, but an implicit stamp of approval for its economic development. This means that Brazil, and its BRIC brethren, deserve not only a seat at the table when global economic issues are being discussed but that they are central players in such discussions.