Ask yourself this…

If the U.S. housing market is at rock bottom, how can heavy-equipment maker Caterpillar, Inc. grow its sales by 13%?

The answer is simple: emerging markets.

In April, Caterpillar (NYSE:CAT) announced surprisingly strong results and a 13% surge in Q1 profits. Caterpillar’s work-around to the U.S. housing crunch is an aggressive push into emerging markets.

Countries such as China, India and Russia contributed to the company’s 30% leap in international sales. By contrast, North American sales rose a paltry 4%. Sales and revenues outside North America represented 58% of total sales and revenues in Q1 — up from 53% of the total a year ago.

Naturally, Caterpillar is increasing its commitment to emerging markets. In addition to China and India, the company is focused on the Commonwealth of Independent States — or the former Soviet Bloc.

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If you look at the chart of the Istanbul Stock Exchange your gut instinct is to cut and run. But is that the best strategy for an emerging market with great upside potential?

Like other emerging markets, Turkey is taking it beating from inflation. So far, the government’s policies have kept inflation below 10% — putting it a notch above China.

Let’s face it: inflation is wreaking havoc on all markets, including the U.S. In fact, inflation is probably the biggest cause of volatility in emerging markets today. For investors, that leaves that basically leaves two choices: 1) go into something stable like bonds or 2) get in at the bottom and ride out a market that has the legs for long-term growth.

Turkey’s economic fundamentals tell me that long-term growth is the way to play the Istanbul Stock Exchange. And the best way to get in now is through the ISE National 100 Index. Since it reflects the performance of the Istanbul Stock Exchange, the chart below may lead you think that Turkey is in deep trouble. However, if you discount the effects of inflation, Turkey has the potential to be a good place to put your money for the next few years.

One of the most important aspects of investing in emerging markets is government stability. The largely Muslim nation is on a quest to make important reforms for the 21st century.

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Ask your stockbroker if he reads Cement World. If he says no, fire him immediately.

Here’s why…

When it comes to commodities, cement could be the next oil of emerging-market investors.

In particular, North Africa’s soaring cement prices present a promising ground-floor opportunity, reported a recent article in Cement World. North African cement is one of those gems that once again proves emerging markets could be far more lucrative than the U.S. providing you know where to look — including Cement World.

Sure, cement is as boring as it sounds. You never hear about cement wildcatters or Somali pirates hijacking a boatload of cement. The most exciting thing you probably know about cement is that the Wise Guys in New Jersey use it to make a pair of boots for some deadbeat taking a one-way trip down the Hudson.

Given the headlines, the most obvious conclusion to draw about cement is that the construction bust in the U.S. put a world of hurt on the industry. And if you only considered U.S. cement makers you’d be right.

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