The World Cup kicked off last week as soccer teams from around the globe converged in South Africa. The once-every-four-years tournament is one of the most-watched sporting events in the world; and as you can imagine, it involves large amounts of money for the host country and participants.
There are a few clear-cut favorites to win the 2010 World Cup, and it could boost their economy as consumers spend more money and rejoice in a victory. I have chosen my five favorites to win the tournament based on the FIFA rankings and my own bias. (For related reading, check out The World Cup 2010 Portfolio.)

IN PICTURES: 20 Tools For Building Up Your Portfolio

Europe
iShares MSCI Spain ETF
(NYSE: EWP) is one of the PIIGS of Europe, and the ETF's performance reflects the name, losing 29% so far in 2010. The fact that the ETF has 42% of its assets in two stocks, Banco Santander (NYSE: STD) and Telefonica (NYSE: TEF), makes this a very risky investment. With debt troubles along with unemployment near 20%, it is not a good situation when more than 44% of the ETF is invested in financials. However, the ETF and country are oversold and could rally with a World Cup win.

iShares MSCI Netherlands ETF (NYSE: EWN) is a quiet, yet smart, pick to win the title. The country is similar in the eyes of investors because it is not the most popular choice among international ETFs. The ETF is down 12% in 2010, much better than Spain and in a better situation going forward. The ETF's largest holdings are consumer staples and industrials with Unilever (NYSE: UN) making up 17%. GDP turned positive in the first quarter, and the future looks bright for the orange team.

iShares MSCI Germany ETF (NYSE: EWG) is the largest economy in the Eurozone and is a popular pick to win the World Cup. The ETF is down 14% in 2010 and has avoided some of the mess, but considering it is the largest economy in the continent, it will suffer. The ETF is very diverse with six sectors making up at least 10% of the allocation. Germany is a solid bet to win the tournament and provide solid returns in Western Europe. (For more, see Going International.)

South America
iShares MSCI Brazil ETF
(NYSE: EWZ) is one of the clear favorites to win the tournament and a favorite among investors as well. The country rebounded nicely from the recession in 2009 and has now strung together four consecutive quarters of positive growth capped by a gain of 2.74% in Q1 2010. The ETF has 76 stocks and is heavily weighted toward the materials, energy and financial sectors. Brazil remains my favorite emerging-market country, and it will be hosting the 2014 World Cup and a future summer Olympics.

iShares Chile Investable Market Index ETF (NYSE: ECH) is my Cinderella story and my long shot to win it all. Chile has about the same odds as the U.S., so why not? The Chile ETF consists of 30 stocks that are nicely diversified between the utilities, industrials and materials sectors. Several of the ETF's largest holdings are either at or near all-time highs. Lan Airlines (NYSE: LFL) closed out last week at the best level ever. The country's stock market often moves with the price of copper due to the fact it accounts for about half of the GDP. ECH is an aggressive play, though it does have upside with a worldwide economic rebound.

Final Pick
At the end of the day, my heart goes with the U.S. (not listed). But if I were forced to choose, it would be with Brazil to win the World Cup and Chile to provide the best return for the remainder of 2010. (For more, see Broadening The Borders Of Your Portfolio.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    Starbucks: Profiting One Cup at a Time (SBUX)

    Starbucks is everywhere. But is it a worthwhile business? Ask the shareholders who've made it one of the world's most successful companies.
  2. Stock Analysis

    How Medtronic Makes Money (MDT)

    Here's the story of an American medical device firm that covers almost every segment in medicine and recently moved to Ireland to pay less in taxes.
  3. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  4. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  5. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  6. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  7. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  8. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  9. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  10. Investing

    Don't Freak Out Over Black Swans; Be Prepared

    Could 2016 be a big year for black swans? Who knows? Here's what black swans are, how they can devastate the unprepared, and how the prepared can emerge unscathed.
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center