Investing In Emerging Markets – Sponsored Post
Decades ago investing in the U.S. market was the preferred option for those in other countries looking to maximize their wealth. Our country seemed pretty stable and growth looked like it might never end.
Of course, things didn’t continue moving in that direction and some major investors took a bath on their investments. Luckily, investors don’t sit still waiting for countries to recover financially. They’re always ready to move onto the next big thing. In this case, they had already started looking.
In the 1980’s, some investment companies thought the way to go was to look towards what was initially called “less developed countries”, and later changed to emerging markets, mainly because it sounded better. In essence, what they were looking at were countries that seemed like they were on the verge of becoming a major financial player in the world.
While countries like Japan were starting to have debt issues, other countries like India and China were starting to emerge, flexing some financial muscle and figuring out ways to make an impact on their own economies. Countries like these were looked on favorably because they offered the possibility of high returns on their investment, even as there might have been other issues of stability within the country.
You started seeing more investment in countries like these, which included Russia, which was trying to turn the corner after the fall of communism, Brazil, a large country looking to find its financial footing, and Saudi Arabia, which was pretty strong because of oil but realizing they needed to be more than just an oil rich nation.
India and Mexico, which is also considered an emerging market, are enticing because of their willingness to engage industries that compete well financially with the United States on things like health care. For instance, insurers in California and a few other states actually send some patients needing inpatient services to these countries, which have qualified physicians and top notch facilities and can provide surgical services at much lower rates. Also, India is investing greatly in training both medical billing and coding as well as training nurses to help fill a need in the United States and other countries as well.
These days you see emerging markets like the United Arab Emirates and, believe it or not, Iran and Cuba, countries trying to grow their economies and become financial players in the world while retaining their own national identities and beliefs. There are many foreign investments in countries like these as they work on growth while still having to deal with their own internal politics and their place on the world stage.
Even though it can be risky investing in emerging markets, the potential for a high return is enticing. It’s estimated that, depending on country, a return on investment can be anywhere from 7 – 16% a year, way more than investing in the United States, where a return on investment averages around 4%. Frankly, that’s hard to steer away from, even in volatile countries where the political winds can change in a moment’s notice.
However, since it’s been determined that many of the countries considered as emerging markets have lower debt ratios, improving credit, a larger population and unknown growth potential, it’s not hard to see why investing in emerging markets will be something to consider as time goes on.
This post was sponsored by Excel Funds, written by the owner of this blog.