What if you could buy the ninth largest economy at a discount of over 35% of book value (Investopedia.com describes book value as: “…the total value of the company’s assets that shareholders would theoretically receive if a company were liquidated.”)? An economy that propelled the average monthly pay from $80 in the year 2000 to $967 in 2013, has unemployment of only 4.9 percent and a GDP per person of $14,818.
The capital of this country has repeatedly been called the “billionaire capital of the world” by Forbes. This country has 144 million people, spans nine time zones and is rich in natural resources.
I’ve recommended to many clients to have a 2-4% allocation to this country and I just purchased some of this countries’ index for my personal investments, too.
What is this country? Make sure you’re sitting down when you read this. If you haven’t already guessed, the country is Russia. I know, I know. Aren’t they doing crazy things like annexing countries? Yes, they are. Don’t they have an uncontrollable, quasi-dictator? Yes, but…
Famous 18th century financier, Baron Rothschild, said “The time to buy is when there’s blood in the streets.” In other words, buy when everyone is afraid and selling. While the Russian economy is no U.S. economy, if you’d have bought the Dow Jones at its recent weakest (March, 2009) it would have almost tripled. The DJIA was then about 6,500 and is now over 17,400, closing as high as 18,024 last December.
This is a risky category and should only be a small part of an investors money but could have significant upside.
The Russian mutual fund I use has 29 investment holdings, access to about 85% of their stock market, a forward P/E ratio of 4.54 (low is good) and a 12-month trailing yield of 6.07 percent. If you’d like more information you can email me at RonPhillipsAdvisor@gmail.com or call me at (719) 545-6442.