Which Countries Will Choke and Which will Come out Smelling Like A Rose

As the world grapples for financial stability, the questions that I keep coming back to is how bad will it get and who will come out clean? It looks like trouble and the stench of doom will follow well into the next year with GDP struggling at under 1%. From first light I would think that China and some of the emerging countries would be doing better. They normally fair better when the U.S. starts to Falter--This is true in some cases and not so true in others. China is still good but, seeing a slowdown in it's own economy. The emerging countries which depend on borrowing are also being hit pretty hard by the financial crises.

Europe is going to see a recession that will be deeper and longer than that in the United States. Similar to what happened in the States, European Banks porked themselves by over lending to the overheated housing markets and by taking excessive risks with derivatives.

China will come out stronger than most with two trillion dollars in bank reserves that it can utilise to make it through the crises. South Korea, Mexico, Russia and India are in a stronger position to weather the storm as well and have little need for external borrowing. These are the countries that will grow at a faster clip than developed countries. Russia which has no dependence on foreign oil will become a stronger player on the world market place.

The world will see an overall decline but the emerging countries will still fair better than the developed countries. The Gross Domestic Product (GDP) of these emerging countries will decline from 8% in 2008 and is estimated to come in at 6% for 2009. Even with this decline the emerging countries will continue to outpace developed countries which will decline in GDP growth from under 2% to less than 1%. This data comes from the World Monetary Fund.

Where Should I Put My Money Now? Investing In A Rotting Stock Market.

1. 
   
   Even if the economy slips into a recession or slows to a crawl, there are certain industries that statistically have proven themselves to weather the storm. Don't think about the profits that were made yesterday or last year, look forward and long term. The economy for the year 2008 is expected to slow down considerably but, it will also will also come back in 2009. As the economy shifts you can expect the stock market to precede this slow down by one to three months. By the middle of Summer you should see the stock market rebounding as investors anticipate a better economy.
   
   Historically there are investment areas that do well in a bear market. If you are concerned about the economy and your portfolio, here are the best industries to invest in right now that are the least vulnerable to a slow economy. Think Basic needs like retail food, tobacco, soft drink manufacturers, cosmetics, utilities, pharmaceuticals.

Also Consider investing in companies that are doing business with China and India. China and India still have the hottest economies on the planet and their growth is expected to continue at a very lively pace. GE and IBM have both brought in decent profits with their collaborations with Chinese businesses. Also software should do well this year.