View from the Observation Deck

1. If you are considering purchasing shares in a packaged product of equities from Brazil, Russia, India & China (BRICs) or Brazil, India, China & S. Korea (BICKs), we believe there are reasons to be optimistic.
2. Excluding Russia, which is heavily levered to the price of oil, the other four central banks spent the majority of 2010 and 2011 tightening monetary policy (Brazil tightened up to 8/11) to fight inflation.
3. With inflation largely contained, the central banks within all five of these countries have cut their key benchmark lending rate at least once since the end of 2011. Brazil has been the most aggressive.
4. Historically speaking, the rule of thumb is it takes 6 to 9 months for changes in monetary policy to affect economic activity.
5. Why is now a good time to at least put the BRICs on one's radar? The MSCI BRIC Index was down 2.03% (USD) year-to-date through 7/23. The index, however, was down 12.34% (USD) from 4/30-7/23.
6. In July, the International Monetary Fund revised down its GDP growth forecasts for 2012 & 2013, due primarily to the economic weakness in Europe.
7. It now has "Emerging & Developing Economies" growing at a rate of 5.6% in 2012 and 5.9% in 2013, compared to 1.4% (2012) and 1.9% (2013) for "Advanced Economies."