Investment Strategy

During the fall of 2005 the Investment Club has USD25,000 to invest. The Investment Club invests in two portfolios: an emerging markets (BRICs) portfolio and a developed market (S&P 500) portfolio.

As projected by Goldman Sachs in 2003, the total size of BRICs economies (Brazil, Russia, India, China) are likely to exceed the G6 by 2040. BRICs will become a new engine of growth for the global economy, offsetting the impact of graying populations and slower growth in developed countries.

We believe this trend of global economy implies great opportunities for companies doing BRICs-related businesses. As a result, there will be tremendous potential for these companies' stocks, which should reflect the growing earnings generated from the rising BRICs.

Whilst we firmly believe that the emerging BRICs present the best long term investment opportunities, our investment horizon of a semester leaves us a more short term investor. We believe that we can opportunistically take advantage of cyclical differences between the short term growth of the emerging and developed markets, hence the addition of the S&P 500 portfolio.

We undertake an asset allocation process involving a country and market analysis to allocate funds between the two portfolios. This asset allocation takes place at the launch of the portfolio and we review the allocation at regular intervals.

Once the funds have been allocated to the respective portfolios, we pick stocks in a ¡°bottom-up¡± fashion, relying on the research conducted by members. Members¡¯ market knowledge has proven to be key factor for our success in picking star stocks like Shanda and Infosys.