The BRICS nations (Brazil, Russia, India, China, and South Africa) are in the news. All five want to pivot from the U.S. Dollar and start using their own, gold-back currency. Many respected investors, expats, and digital nomads are calling this “The Death Of The Dollar.”
I disagree.
Many of the BRICS countries, while fun to visit, are dysfunctional as actual nation-states.
Bolivia, one of the poorest and most remote countries in South America, has a higher GDP per capita than India.
Bolivia also has a higher percentage of Internet users.
And more hospital beds per 1,000 inhabitants.
Also, if the BRICS countries become an actual threat to the Western world, countries like the USA and UK will suspend all BRICS assets and investments. Kind of like what they did to Russia in 2022.
In other words, diversifying into a BRICS currency is a bad idea.
At the same time, a weak dollar does mean less purchasing power abroad. And nations shunning US corporations and products means a slowing stock market. Even potentially no growth at all. Like Japan in the 2000’s, or France in the 1970’s.
Which is why I want to highlight three bulletproof investment sectors.
Ones that are unlikely to face international disruption.
And whose products are always in demand.
What are these sectors?
Guns, grains, and steel. Put another way, the defense sector. The food supply. And natural resources. This is personal opinion, not financial advice, but I see all three sectors as essential to the United States. And unlikely to get disrupted no matter the economic climate.
Guns
AKA the military industrial complex. AKA, companies that build tanks and planes for the United States.
These are well-known businesses like Lockheed Martin and General Dynamics. Maybe not the most exciting or “hidden gem” of picks. But quality businesses that have performed well in the long-run.
And if you think a business like Lockheed Martin is boring, just remember that the stock grew by 1,600% since 1995!
Grains
When I talk about food, I’m not talking about retail products like pudding cups or hot dogs. Most consumer food conglomerates (like Conagra) seesaw in share price and are heavily dependent on discretionary spending.
The agricultural stocks I’m thinking of are businesses like Nutrien.
Nutrien is a major fertilizer producer. Making more potash than anyone else in the world.
It’s also a U.S. and NATO aligned businesses, with Nutrien serving markets like North and South America. As well as Australia.
Steel
Countries collapse without certain natural resources.
These include: iron, oil, and copper. Just to name a few.
Companies like Valero Energy are extremely U.S. focused. And they pay a high dividend.
Likewise, Chevron and Rio Tinto serve Western markets. Providing everything from iron and rare earth metals (Rio) to gasoline and petrochemicals (Chevron).
Safe bets dealing with hard commodities. And valuable in almost any situation.
The BRICS are set to unveil their new currency in August. And I don’t think there’s much to worry about. Especially if you’re focused on essential, mission-critical infrastructure that benefits the USA and NATO.