As Economies Slump, How to Play Emerging Markets

Investors also continue to be high on Brazil, with its emerging middle class and bustling industrial base.

"The Brazilian economy is just going on all cylinders," says John Carter of the Trade the Markets newsletter. "Brazil is just kind of busting out right now."

Investors looking for a safe play in the country can play the iShares MSCI Brazil Index

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[EWZ  Loading...      ()   ] which follows Brazilian stocks.

However, an increasing number of countries that trade on the American exchanges are doing business in Brazil, allowing investors to capitalize through individual stock moves.

Chip Hanlon, president of Delta Global Advisors, likes some of those companies, particularly  Perdigao

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[PDA  Loading...      ()   ], a big meat and dairy producer in Sao Paulo which saw its sales grow by more than 80 percent in the second quarter.

India also presents an interesting opportunity on both the ETF and stock ends.

Hanlon likes Tyson Foods

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[TSN  Loading...      ()   ] as a company capitalizing on the newfound demand for frozen foods in India, where the population in coming years is expected to overtake China and make it the nation's most populous country.

"If you're going to take a look at the consumer, I'd favor consumer staples," he says. "Within that group, I'm really a fan of consumer goods companies. A year ago we despised such names. We specifically excluded them from our global agriculture portfolios."

Uneasy About Russia, Europe

Tensions in Russia, particularly over its intervention in Georgia, have many analysts uncertain about what to expect from the country. That could spell an end to investment momentum there.

"Russia is a market that has been very, very positive over the last 10 years," Landesman says. "We really have to watch if there are seminal changes going on or if this is their way of beating their chest."

"Brazil to me is a little more appealing than Russia," he adds, "because Brazil isn't attacking its neighbors."

European economies, meanwhile, have some US investors scared because of its central bank's inaction in addressing recessionary pressures through monetary policy. Landesman says he has no money in eastern and central European markets.

Some, though, take a wider view of emerging markets when making investment decisions.

Peter Tanous, president of Lynx Investment Advisory, says broad plays on natural resource companies, timber in particular, that can take advantage of global growth will do well.

"We're investing in four areas--gold, water, energy and timber. We expect these are going to very interesting investment opportunities for the next 20 years," Tanous says. "It's not based on the retrenchment of the economy, it is based on what is happening in the world today that nobody would have predicted 10 years ago."

At the same time an air of caution remains.

"I think it's reasonable to look at these emerging markets now," Hanlon says. "But I wouldn't jump in with both feet."