Sugar is one of the most potent “drugs” that is consumed by masses on a daily basis. High consumption of sugar followed by lack of any exercise or leading a sedentary lifestyle leads to obesity. In fact, obesity is one of the major healthcare issues in the U.S. where billions of dollars are wasted each year treating all the healthcare issues created by it. Sugar is one of the leading causes of obesity. This legally approved drug is mixed in plain sight with most of the foods we consume and is almost impossible to avoid.

The following are some of the interesting facts from an article on Sugar in MaClean’s magazine:

• Canadians eat 88 pounds of sugar per year. Americans naturally beat their northern neighbors with an annual intake of 96 pounds per person according to data from the U.S. Department of Agriculture.
• Of the 600,000 items sold in U.S. grocery stores, 80% of them have added sugar. Sugar is pretty much added to anything we buy as food from grocery stores. That is a can of “pure” orange juice with no added concentrate tastes like sugar water and nothing like orange juice. But since people have been drinking this type of orange juice since they were born most cannot even possibly know how an orange juice should taste like.
• Sugar or its cheaper substitutes like high-fructose corn syrup are added to nearly every single product we consumer including pasta sauce, salad dressing, bread, peanut butter, etc.
• Even “healthier” options such as low-fat ones also contain added sugar. Honey, fruit juices are no exceptions. Like I mentioned above with orange juice, there is no real juice sold in any store.
• According to the World Health Organization (WHO) sugar should make up less than 10% of our energy intake per day. But we already exceed that. No wonder obesity is a major epidemic keeping hospitals and health care professionals busy.

The infographic below shows how much sugar is in some of the favorite foods we eat:

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Source: Death by sugar, MaClean’s

One of the key strategies for success in investing is diversification. It involves not just investing in various asset classes in  a single country but a good diversified portfolio should include a variety of assets spread over many regions or countries. Global diversification in the equity portion of a portfolio is important since equity markets’ performance vary wildly from one country to another every year. For example, U.S. equities were star performers compared to European stocks. But this year, European stocks are handily beating their U.S. peers at so far.

The long-term performance of equity markets is related to the economic performance of a country or region. Over the years, the economic power of countries have changed. The chart below shows how the share of world’s GDP has changed over the past 200 years:

Source: Mastering Global Diversification: What the Masters Tells Us About the Markets by Jeffrey Klientop, April 15, 2015 Charles Schwab

Today emerging markets of China and India were developed markets 200 years ago when they accounted for 50% of the world’s economic output. Even Brazil was also a rich in the 19th century when the boom in rubber demand helped its economy. The beautiful Amazon Theater in Manaus in the hear of the Amazon rainforest was built during that time. However Malaysia took over the leading producer of rubber when some rubber plants were taken to that country to establish a plantation by a man. This led to the decline in the wealth of Brazil.

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The Amazon Theater, Manaus, Brazil

The chart above also shows that the U.S. was a tiny emerging country back in the 1800s. At that time, the country was neither a military nor an economic superpower. The share of Europe’s economic output as a percentage of the world’s GDP has also declined since the late 1900s.

The key takeaway is that economic growth shifts over the years and hence today’s emerging countries could one be tomorrow’s developed countries.

Related ETFs:

• iShares MSCI Brazil Index (EWZ)
• iShares S&P India Nifty 50 (INDY)
• iShares FTSE/Xinhua China 25 Index Fund (FXI)
• SPDR S&P 500 ETF (SPY)

Disclosure: No Positions

The unemployment rate remains high especially in select European markets. For example, Germany has the lowest rate and the rates continues to decline. While the unemployment rate in Germany and Spain are declining, France and Italy it remains stubbornly high and is not declining. According to a report by Natixis, a jobless recovery is currently occurring in France. The following charts show the contrast in unemployment rates in the four largest Eurozone economies:

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Source: Jobless recovery? by Patrick Artus, Natixis

The chart below shows the latest unemployment rates in the EU:

Source: Eurostat

The unemployment rate was just 4.8% in Germany in February. The highest rates were in Greece and Spain respectively at 26% (in December, 2014) and 23.2% respectively.

The following chart shows the comparison of unemployment rates in the US, Japan and Europe over the years:

The Germany unemployment rate is closer to the U.S. rate. The US rate in February was 5.5%.