You've heard the phrase "Follow the money."
I've got a new one for you...
Follow the people.
That's where the money's going. Like iron to a magnet. Consumerism...
demand... growth. Follow the people, and the money will follow you.
Let me throw a couple numbers at you...
407: The number of emerging market "middleweight" cities with
populations between 150,000 and 10 million
40%: The amount these cities will contribute to global growth
By 2025, these 407 "middleweight" cities will contribute more to
global growth than the developed world and global "mega cities"
(with populations over 10 million) combined.
Over the next 12 years, 235 million households will earn more than $20,000
in the developing world. That's up from 80 million in 2007. It means an extra
$3.1 trillion worth of consumption will hit the markets in developing
economies.
That's how investors will make the truly big money in stocks over
the next decade and beyond. They will follow the people...
Populations in these "middleweight" cities are expected to grow
1.6 times faster than the global average. That means more workers and more consumer demand.
Countries with the strongest urban GDP growth are going to be places
companies are likely to set up shop.
Over the long term, the demographic shifts into a consuming society are
going to keep the BRICs hot... and put other countries on the map you might
not have considered hot spots.
Here's what I want you to do. Take a look at your portfolio. Check out the
big multinational companies you own. See how much exposure they have to these
markets.
Many of them will be underexposed to the big demographic shifts we're
talking about. That means they'll be counting on developed markets to grow
revenues. Not a smart move over the long term.
If you're underexposed to global economies with growing "middleweight cities,"
one stock you should consider buying is Unilever PLC (UL:NYSE). This consumer
goods, food and beverage maker has a major footprint in markets with growing
consumer armies.
Unilever – which owns brands such as Ben & Jerry's, Lipton and Dove
among others – was setting up shop at the very start of the big surge in emerging market
consumer growth. And even earlier than that in China, India, Indonesia and
Brazil where the company has had a presence for half a century.
As you can see from the chart below, Unilever's consumer beauty and health
products rank in the top two slots of market share in major growth markets
such as Indonesia, the Philippines, India, Russia, and, of course, China and
Brazil.
View larger image
More than 2 billion people use a Unilever product every day. But there are
about 1.8 billion people set to move up the consumer ladder and become
consumers by 2020 – most of them in developing markets.
Unilever is already positioned in these "high traffic" regions
of the world. And it is looking to expand into the next untouched markets
such central Africa, Myanmar and Peru.
That makes it the perfect company to "follow the people"... and
let the money come to you.
Happy investing,
Sara
