In the previous post I was talking about frontier markets and how they may benefit a speculator for their pension, QROPS, SIPP or overall portfolio of investments. In this article I'll finish with more important reasons as to why they should be up for consideration.
Economic growth across all Frontier Markets is lifting living standards and leading to expansion of structure and rising consumption. As such there are abounding possibilities for investments in construction, transport, banking and finance, and telecommunications. Similarly, Frontier Markets have demonstrated low relationship with developed and expanding markets, and therefore , exposure to such markets can help in cutting overall portfolio volatility.
however, investing in Frontier Market funds isn't without a degree of risk. For fund executives liquidity is a major issue, as is the aforementioned political steadiness risk. Foriegn Excahnge issues are also to be observed closely.
Financiers should realise that they may well experience important price unpredictability in any particular period. A medium to long-term view should be taken. Swapping to defensive assest groups should be took when the elementals suggest that the economic cycle is heading toward the contraction period in key global economies.
So when investing in these markets, if you're not a professional financier with plenty of time to monitor the underlying macroeconomic basics you must invest with an experienced and qualified financial advisor. If you do not it could go wrong.
However, that is the likely downside. When weighing up the upside potential it is vital to recollect that just a decade ago, China and India were seen as exotic, even idiotic investments. Now for many investors they represent an essential part of their portfolios.
Today's established expanding market heavyweights were yesterday's Frontier Markets. There's a clear trend here and it is not unbelievable that in the not so distant future we may view investing in Vietnam, Argentina, Nigeria and Kazakhstan in the same way as we do the BRIC nations today.
Disclaimer
Stockholders must always seek professional fiscal advice relating to the acceptability of making an investment in any stocks or following any investment methodologies. Nothing in this article shall be considered to be a solicitation or offer to purchase or sell any security, future, option, fund or other monetary instrument or to supply or provide any investment guidance or service to anyone in any jurisdiction.
Economic growth across all Frontier Markets is lifting living standards and leading to expansion of structure and rising consumption. As such there are abounding possibilities for investments in construction, transport, banking and finance, and telecommunications. Similarly, Frontier Markets have demonstrated low relationship with developed and expanding markets, and therefore , exposure to such markets can help in cutting overall portfolio volatility.
however, investing in Frontier Market funds isn't without a degree of risk. For fund executives liquidity is a major issue, as is the aforementioned political steadiness risk. Foriegn Excahnge issues are also to be observed closely.
Financiers should realise that they may well experience important price unpredictability in any particular period. A medium to long-term view should be taken. Swapping to defensive assest groups should be took when the elementals suggest that the economic cycle is heading toward the contraction period in key global economies.
So when investing in these markets, if you're not a professional financier with plenty of time to monitor the underlying macroeconomic basics you must invest with an experienced and qualified financial advisor. If you do not it could go wrong.
However, that is the likely downside. When weighing up the upside potential it is vital to recollect that just a decade ago, China and India were seen as exotic, even idiotic investments. Now for many investors they represent an essential part of their portfolios.
Today's established expanding market heavyweights were yesterday's Frontier Markets. There's a clear trend here and it is not unbelievable that in the not so distant future we may view investing in Vietnam, Argentina, Nigeria and Kazakhstan in the same way as we do the BRIC nations today.
Disclaimer
Stockholders must always seek professional fiscal advice relating to the acceptability of making an investment in any stocks or following any investment methodologies. Nothing in this article shall be considered to be a solicitation or offer to purchase or sell any security, future, option, fund or other monetary instrument or to supply or provide any investment guidance or service to anyone in any jurisdiction.
About the Author:
You will find out more about investments, pensions, SIPP's QROPS pension and get the right QROPS advice from Richard W Holmes who represents an independent company of Financial Advisors offering a top quality and unbiased service on all facets wealth management and money planning.
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