Did you know that the Russian stock market grew by 89.56% last year? Or that the Egyptian stock market rose by an equally impressive 57.98% per year for the past five years? Performance in the emerging markets in Eastern Europe, Asia, the Middle East and in South America are nothing short of spectacular. In addition, an impressive number of companies in these emerging markets rapidly turning to regional success stories in large multinational corporations. As the British Investors Chronicle reported recently, "If you're looking for decent, relatively inexpensive, relatively safe shares that you no longer have to search to narrow your selection ... The world is literally at your feet."
Does it make sense, but for a small, cautious investors invest their hard earned money in this sector? For those who have already accumulated assets closer to home, the answer may indeed be good. We live in a global economy, stock markets have traditionally all other forms of investments and one of the golden rules to make money is to diversify surpassed. Yes, sometimes it was a very good time to start dipping your toes instead of exotic foreign waters.
Why emerging markets to offer such opportunities? I have already said globalization and its impact should not be underestimated. The developed world depends for its own development of products and services purchased from the emerging countries. Increasing political stability, strong equity markets and rapidly rising commodity prices add to the attractiveness. It should also be noted that many companies are now not only on their local stations, but also in London and New York Stock Exchange.
What are the pitfalls? It is generally said that emerged in the world's largest fairs in the long-term bad news for emerging market shares spell. This may have been in the past, but is much less current. Many of the hotter markets, which suffered a heavy crash in May last year, has already returned. Anyway, it's a big mistake to lump together all emerging markets. Everyone needs to be assessed, how to do individual stocks on their strengths and weaknesses. There are large differences between, say, Thailand and Brazil in the same way that there is a big difference between, say, Delta and Ryanair.
How can a piece of the action Emerging Markets? If you're ready for the research you could do to direct investments. A good source of information, Boston Consulting RDE-100 list. The initials "RDE" means "rapidly developing economies and the list includes 100 companies from emerging markets, the front of the nose when it comes to globalization of their business is. The list can be found at bcg.com. Some are already global players, including heavyweight names such as CEMEX in Mexico (one of the world's largest manufacturer of cement) Hong Kong Johnson motor (which is 40% of the worldwide market for small electric motors) and Brazil Embraco (over 25% of the global market for compressors). Other already enjoy national or regional dominance and are now ready for global growth. These include Tata Motors, India, Turkey, consumer goods companies, Vestel, Egypt and Orascom Telecom. Sixty of the companies on the list, which incidentally included. If you prefer less direct involvement, there are many managed funds to selection. The highlight for the last five years, Credit Suisse European borders, currently a 292% profit.