Chapter Eighteen

The World Belongs to Optimists

Golden Investment Attributes and Rules

In emerging markets investment, I believe it is necessary to be optimistic. The fact remains that there have always been problems and there will continue to be so in the coming years throughout the world. But we are entering an era that is perhaps unparalleled in the history of mankind. With higher income and living standards, better communications and technology, improved travel, greater international trade, and generally better relations between nations, emerging markets investors have the perfect opportunity to capitalize on the benefits.

Studies have shown that stock market investments made in a patient and consistent manner will invariably grow, since there is a natural tendency for the value of equity investments to rise in order to keep up with inflation. In addition, independently managed businesses, competing successfully in the marketplace, are generally winners in the stock markets as there is a tendency for their sales, profits, and assets to expand. However, it is not always possible to predict whether a company is going to be successful or unsuccessful, so it is necessary to diversify.