Ceri Austin 
Opportunities to invest don’t come by often in the market. And while investment opportunities are everywhere, one special kind of opportunity goes under the radar more often than not: emerging markets.
These are markets that nobody sees coming until they’re already too late to get on board (when the returns start coming in). They can go from a diamond in the rough to a blue-chip stock overnight and without a second glance. It’s like they’re some kind of cryptid or something because so few investors actually know about them before it’s too late.
If you have any sense for investing you’ll know that no opportunity is guaranteed, but emerging markets offer up some pretty promising odds for making money back on an investment.
Economic Growth
Investing in developed countries is for chumps. Investing in less mature economies like those found in emerging markets? That’s where the smart players put their money.
Not only do these investments provide diversification benefits to portfolios that need them most, but when one country gets hit with an economic downturn, all their other investments will help offset it. Plus, somebody has to be funding these sustainable futures we keep hearing about and there’s plenty of money to be made doing so (especially if we start moving away from fossil fuels).
But let me make this clear: Not all emerging markets are created equal. Some are better than others and some shouldn’t even be considered unless you’ve got hundreds of hours to burn poring over charts and graphs.
Diversification
Technologies and demographic shifts are changing everything about how economies around the world work right now and in case you missed that part of your morning paper, I’m here to tell you about it!
What that means is that some businesses could experience powerful economic tailwinds like higher productivity or access to a growing middle class. We love talking about what it takes for people living below poverty lines make more money… but rarely do we ever talk about what it takes for people in the middle class to become rich.
Never thought about it before, huh? Well while you’re busy trying to wrap your head around that one, take a moment to consider how diversifying an investment portfolio across multiple countries can help reduce the impact of some industries on its value. Lose money in one place all you want but there’s no way we’re risking it all in one place – we’ve got investors’ money to think about!
Emerging Markets ETFs & Mutual Funds
I’m gonna be honest with you here: You’d have to be an absolute maniac to even think about investing in emerging markets without these funds.
They make everything easy and do literally all of the work for you so why anyone would try and do this alone is beyond me. Do they like losing money or something?
It doesn’t matter which funds you go with either, just pick one that follows broad emerging market indices or provides targeted opportunities in specific sectors or regions. Then listen closely: Do not try and time your investments. You will lose out on growth opportunities every single time – I guarantee it.
Risk Management
The global economy is changing rapidly. It used to be that emerging markets were never taken seriously because most people didn’t even know they existed let alone believe in them as investments.
But times are different now. Emerging markets aren’t going anywhere anytime soon and if anything, they’re only going to grow more popular over the years as investors learn more about their potential. These economies typically exhibit rapid GDP growth rates… among other positive indicators such as higher market capitalizations and investor-friendly regulatory environments.
So what does that mean? It means that as long-term success depends on when investors first start taking advantage of growth opportunities… otherwise risk-aversion could cost them dearly!
While these countries offer long-term potential, there are risks associated with investing that must be carefully considered. For example, a strong US dollar might affect exports from EMs, while political instability or changes to global trade policies could impact specific companies within this sector.
Other key indicators to watch out for include economic volatility and commodity price pressures. Doing comprehensive research, diversifying investments and staying informed will help reduce risks and increase gains over time. If you can afford it, engaging a financial advisor who specializes in emerging markets could also prove invaluable.
