The Wall Street Journal recently served up an interesting headline: “Russian Wealth Fund Rattles West.”
It seems that Russia has tens of billions in free cash on hand, an amount that could become hundreds of billions in the next few years. It was only a decade or so ago that Russia had defaulted on its debt, looking like a financial basket case to all the world. But now, thanks to a gusher of oil and gas money, the Bear is rich -- filthy rich.
It’s a great problem to have, but it still counts as a problem: What to do with all that dough? Like other cash-rich sovereign wealth funds, or SWFs for short, Russia plans to invest its massive pile in high-quality foreign stocks around the globe.
In case you haven’t noticed, the truly exciting growth these days is no longer confined to the U.S. and Europe. Instead it’s found in countries like China, India, Brazil, Malaysia, Taiwan, Turkey, South Africa and so on. Emerging market economies are growing by leaps and bounds.
In this 21st-century world that looks so very different from the 20th, the best combination of safety and growth can be found in strong international companies… the same type of companies that Russia will be plowing its cash into.
Justice Litle
Editorial Director, Taipan Publishing Group
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