Go!
Which emerging market region has piqued investors' interest because it is expected to receive a total of nearly $300 billion in economic development aid through 2013?

A.)  South America  
B.)  Sub-Saharan Africa  
C.)  Eastern Europe
D.)  Central America
E.)  The Pacific Rim 

Published: October 8, 2007

The correct answer is      (C.)  Eastern Europe

Similar to the post-World War II Marshall Plan, which sent more than $105 billion from the U.S. to Europe for economic growth and reconstruction, the European Union's "Marshall Plan 2" is pouring billions of dollars worth of aid into Eastern Europe, most of which was economically stagnant under the rule of the Soviet Union.

Today, these formerly communist states are no longer centrally planned dinosaurs; most are now members of the European Union (EU). And all of these new EU states are expected to join the euro currency bloc eventually. To adopt the euro, these countries must meet stringent fiscal criteria covering factors such as government spending, inflation, and accounting standards. Thus, already developed EU nations are not only offering aid, but also building developed financial and political standards.

So while the aid is a boon to these developing nations, it's not the only reason to be interested in Eastern Europe. The region is growing at rates similar to most other emerging markets, yet due to the adoption of EU law and fiscal discipline, these nations offer currency and political stability of the sort typically found only in developed nations. Relatively low wages, growing markets, favorable tax regimes, and an educated population are just a few additional reasons for the region to see strong growth in coming years.

With these points in mind, emerging European economies look like a solid long-term bet for investors. In fact, stock markets in Eastern Europe are already seeing strong gains. The major indices in the region have handily outpaced returns from the S&P 500 and other developed market indices over the past 1, 3, and 5-year periods.

There are three basic ways to buy into this growth story -- purchasing American Depository Receipts (ADRs), buying U.S. firms with heavy exposure to the region, or buying a closed-end fund or exchange-traded fund (ETF) that invests in the region. Unfortunately, there are only a handful of Eastern European ADRs traded on the U.S. exchanges. In addition, there are only a few U.S.-based companies that have heavy exposure to the region. Buying a fund that invests in the region is far easier, but choosing the right one can be a time-consuming and daunting task.

As you can see, finding the right investment in the Eastern European market can be difficult. Fortunately, StreetAuthority's Paul Tracy, editor of the StreetAuthority Market Advisor has done the work for you. The latest issue of his Market Advisor newsletter offers an in-depth look at Eastern Europe and provides detailed profiles of three promising plays in the region. This includes a monopolistic firm in Poland (trading on the Nasdaq) that has returned +27% annually for investors over the past five years. Best of all, this firm is looking to flex its muscle by expanding its business to the rest of emerging Europe -- meaning investors should see solid gains for years to come. To learn more about the StreetAuthority Market Advisor newsletter, and to read in-depth profiles of the three securities positioned to gain from Eastern Europe's growth, please visit this link.

Want to answer more trivia questions? Visit our archives here!



Stephen Leeb's Market Forecast
Receive a free ongoing, PhD level Wall Street education in how the markets work so that you can see into the future and position yourself accordingly.

The Daily Reckoning
The Daily Reckoning offers a "uniquely refreshing" perspective on the global economy, investments, and the ability to live well in uncertain times.


GFT forex
FREE Introductory Forex Trading Guide -- Contains everything a beginner currency trader needs to know, before entering the fast-paced forex market.

Success Trading
Our Success Trading Group scored 52 Wins in 52 Weeks - 365 Days Without A Loss!

FREE weekly newsletter contains actionable investment ideas from today's leading market analysts.

Special Offers

Makes more sense in one email than a month of CNBC
Learn More

3 Penny Stocks
Poised to Soar 300%
Learn More


Meet the Experts    Email Newsletters    Special Offers    Email Preferences    FAQ
About Us    Advertise    Links    Privacy    Disclaimer    Help

 

(c) Copyright 2001-2008 TopStockAnalysts.com -- All Rights Reserved