BRIC and You'll Miss It

Ok, it was a cute title from the UK Telegraph so I lifted it directly... if you are unfamiliar with the BRIC countries this is a term I believe Goldman Sachs coined earlier in the decade to represent (B)razil, (R)ussia, (I)ndia, and (C)hina.  I talk about this group often even though China gets 80% of the love (with Brazil getting the other 19.5%) These names and many foreign based emerging markets have had a remarkable year to date despite being deep in the red through the first 2 months [May 20, 2009: Year to Date Returns by Country, Go Peru] [May 24, 2009: As Economy Struggles, Russia's Market Has Surged]

In this post from March, with the help of Bespoke Investment Group I showed the 1 year and 10 year returns for the BRIC nations. [Mar 16, 2009: BRIC Country Returns 1 year and 10 Year vs USA] Keep in mind at that point the markets had just bottomed so 1 year returns were scary awful, and Russia's 10 year return was skewed since it was coming out of a currency crisis in the late 90s (so its rebound looks better than it truly was)

That said, I came upon this piece in the UK Telegraph and it is truly remarkable in how much of these magnificent long term moves have come in very short periods of time.  They say it is difficult to time the US market because if you miss the XX so many best days you lose 30% of the return or whatnot, but what goes on overseas makes missing a few days in the US look like child's play.  For example just a week ago Monday India surged 17% on election results [May 18, 2009: India: Singh's Victory a Game Changer]

Check out these other statistics

• ....these highly volatile markets fall as quickly as they rise. Now new research from HSBC Global Asset Management demonstrates the risk of missing their unpredictable upswings.  
• Continuous investment in emerging markets over the past decade produced double-digit annual returns – but less than half that if you missed just the best single day each year. Returns fell to less than 1pc if you missed just the two best days each year. Investors in Brazil could have made nearly 20pc annual returns if invested throughout the decade, but lost more than 2pc a year if they missed the 20 best days.

So if you missed the 1 best day of each year, your returns dropped by half.  If you missed the best 2 each year?  You'd of made 1% a year.  Hey that knocks the socks off the US market the past decade, but you might as well invest in US Treasuries for 1%.

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