What You Should Know Before You Invest
How do you identify an emerging market? On the ground, it’s quite easy. The bathrooms smell, you can’t drink the water, and if there’s smoke in an elevator, likely you’re the only one coughing. Those are the signs of opportunity!
As an investor and writer in and about emerging markets I have witnessed staggering growth prospects, some of which were realized as in the case of China, and some that failed to meet the test, especially those countries in Central America. Every “China story” has its start somewhere, and knowing where to look and the signs to look for are as important as knowing how to invest in these up-and-coming markets.
Emerging market investing is not for the faint of heart. But then, neither is investing in any market of late. Most non-emerging market investors tend to look to these opportunities as being fraught with risk. It’s true. Countries that have frequent changes in leadership, high rates of poverty, illiteracy, and sometimes even high rates of crime are hardly the types of markets that engender confidence. Yet, it is precisely these markets that offer the greatest opportunity if they can fulfill their promise of a better future for their populations. Often, this is not the case. Pie in the sky projections by analysts who garner their research from the Internet or popular news media tend to paint a rosier picture than is actually the case. Worse, they sometimes paint a picture that is far more negative ...