In 2013, U.S. equity soared with the S&P 500 tacking on about 30%. But global investing strategies could have returned even bigger profits if investors knew where to look.
Of course, other regions managed to finish in the red despite a roaring domestic stock market … so global investing cuts both ways.
The hottest stock markets in the world last year for global investors were:
- United Arab Emirates: The Dubai Financial Market General Index (DFM) was up a staggering 108% in 2013, with the Abu Dhabi Securities Exchange (ADX) up “only” 63%.
- Argentina: The Buenos Aires Stock Exchange Merval Index (MERVAL) was up 89% in 2013.
- Japan: Lest you think only smaller and less liquid exchanges went on a tear, the Nikkei 225 (NKY) added 57% last year.
Of course, not all foreign markets had a good go of it in 2013. The worst markets in the world included:
- Peru: The Bolsa de Valores de Lima’s (BVL) General Sector Index (IGBVL) gave up almost 24% in 2013.
- Brazil: The BM&F Bovespa stock exchange in Brazil is one of the largest in the world in terms of market cap. It also was one of the worst performers last year, with the Ibovespa Brasil Sao Paulo Stock Exchange Index losing more than 15%.
- Chile: As if South America didn’t take enough lumps, Chile’s Santiago Stock Exchange Ipsa Index (IPSA) lost about 14% in 2013.
Of course, these are just the stock markets of these regions. Specific investments can vary widely — such as the iShares MSCI Japan ETF (EWJ), which because of a different makeup and weightings only managed to put up half the returns of the Nikkei. Or consider the iShares MSCI Brazil ETF (EWZ), which managed to drop even more than the region’s major stock index, to tally a 20% loss in 2013.
But if you’re looking at regions where there was big momentum — either up or down — then these markets should definitely be on your radar.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.