Mexico and Brazil had a big problem several decades ago. They had a small but very wealthy elite class and a massive underclass. The middle class in these countries was relatively small, leading to low levels of domestic consumption. Since then, a set of far-sighted government policies has helped to create thriving middle classes in these countries, and it’s no coincidence that their stock markets have surged: Brazil’s BOVESPA market index has surged 500% in the past decade, while Mexico’s stock market has risen… Read More
Mexico and Brazil had a big problem several decades ago. They had a small but very wealthy elite class and a massive underclass. The middle class in these countries was relatively small, leading to low levels of domestic consumption. Since then, a set of far-sighted government policies has helped to create thriving middle classes in these countries, and it’s no coincidence that their stock markets have surged: Brazil’s BOVESPA market index has surged 500% in the past decade, while Mexico’s stock market has risen a heady 600%. As a result, in both countries, exciting and rewarding investments await the investor. Economists can even quantify the middle-class gains in these countries using a little-known ratio called the Gini coefficient. Developed by an Italian mathematician a century ago, it’s a formula that assigns a value of zero to a society where the wealth is spread amongst all citizens. Very complex math that goes into determining wealth distribution — suffice it to say it’s far more complex than simply measuring the wealth of the top and bottom of… Read More