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Elsewhere in the region, Canada has been benefiting from an eight-year high in foreign investment. The latest figures show that during 2007 it attracted more than half a trillion dollars, up 14.4% on the year. The markets have reflected this, with the Morgan Stanley Capital International country index for Canada rising about 13% since last August.

However, the slowdown in America is starting to take effect and forecasters predict the Bank of Canada will have to cut interest rates more than expected as the downturn takes hold.

EUROPE

Billionaire investor Warren Buffett is touring continental Europe on the lookout for opportunities to buy into family-run firms. Some countries are more likely to interest him than others. Germany has largely avoided a credit meltdown of the sort Britain is experiencing because about 80% of the population rent their homes.

Spain, on the other hand, is suffering a housing crash that is arguably worse than that in the UK. Property prices are down by as much as 60% in some regions and the situation is not expected to get any easier. The European Central Bank does not have much room to cut interest rates because the strong euro has caused high inflation across the Continent.

Ireland, meanwhile, has plunged almost 25% since last August, and Portugal is down 19%.

Mark Dampier of Hargreaves Lansdown, an adviser, said: “Interest rates in Europe have been too low for countries such as Portugal and Ireland for some time now. In Ireland, for example, this has led to a huge house-price bubble that has not emerged in many of the other member states, including Germany.”

Analysts believe the outlook for the eurozone will deteriorate. While the euro areas grew at an annualised rate of 2.2% in the first three months of the year, this is expected to dip to 1% by the end of the year.

However, some analysts believe Germany will continue to outperform. Alexander Koch, economist at Uni-Credit in Munich, said: “The latest growth figures prove that the German economy is in better shape than most of its European neighbours.”

You can get exposure to Germany through the market-leading Odey Continental Europe fund, which is up 13% over the past 12 months.

Further east, the Russian MSCI index is up more than 27% over the past nine months, as oil has soared and the investment community largely welcomed the election of President Dmitry Medvedev. Mark Mobius of Franklin Templeton Investments said: “The new administration in Russia is expected to be good for businesses, while the tax treatment of oil companies is set to improve.”

Advisers think Russia will continue to perform well even if the oil price drops.

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