Many investors mistakenly believe that portfolio diversification only involves U.S. index funds or spreading investments across different sectors. However, macro investor Ray Dalio emphasizes that true diversification requires investments across various countries and regions. Highlighted companies for diversifying into include Alibaba Group (NYSE: BABA), Nu Holdings Ltd. (NYSE: NU), and Mercado Libre Inc. (NASDAQ: MELI), each representing significant opportunities in Asia and Latin America.
Alibaba Investment Insight
Alibaba has experienced a 42.2% net rally into 2025, despite being labeled “hated” in the market, due to consistent operational performance. Analysts maintain a consensus rating of “Moderate Buy” with a target price of $159.7 per share, indicating a potential upside of 32.5% from current levels.
Nu Holdings and Mercado Libre Growth
Nu Holdings has garnered investor interest, evidenced by State Street Corp increasing its stake to a net position of $1.25 billion, showcasing a year-to-date performance of 27.4%. Analysts suggest a target price of $15.8 per share for Nu, with some estimating potential upside to $18. Meanwhile, Mercado Libre is forecasted to achieve $13.79 EPS by Q4 2025, reflecting robust growth and a high demand valuation, evidenced by a current P/E ratio of 57.8x compared to the industry average of 27.9x.
