EVERYONE'S AN ECONOMIST

now, anticipating signs of a U.S. recession. Pair that with the relentless hype of everything China and it's small wonder there are now six China ETFs, three of which launched last year. But the best way to capitalize on China's boom is to invest elsewhere.

Aside from the political and economic risk inherent in international investing the less stable a government or economy, the less you should pay for stocks Chinese stocks have had an incredible run, with China's market more than doubling in 2007. "It looks scary now," says David Riedel, of Riedel Research Group. China drives everything from commodity prices to global politics, but no market can rocket upward indefinitely. Japan and Brazil, however, are big exporters to China and will benefit from its growth for a fraction of the price.

Japan's stock market is trading at 15 times 2008 earnings, versus its average of 25 for the decade. Granted, the stocks warrant a discount given Japan's stagnant economy. But there are still strong companies there, says Patrick Tan, chief investment officer at Legg Mason International Equities. There are eight ETFs; the MSCI Japan ETF has a larger allocation for the biggest companies, which tend to have strong sales outside Japan.

Investors in Brazil also get a robust domestic economy. Brazil is protected from volatile oil prices 40% of its fuel needs come from sugarcane-based ethanol and the rest from domestic crude. And at 16 times 2008 earnings, it's relatively cheap. The iShares MSCI Brazil Index, representing 85% of the market, is the sole ETF.