Friday, 25 July 2014

Tips for Investing in Emerging Markets Like China and India

Analysts say emerging markets will contribute 70% of world economic growth over the next 4 years. 40% of that will be contributed by China and India alone.

According to industry and investment analysts, emerging markets will contribute 70 percent of the world's economic growth over the next 4 years. Perhaps even more surprising is the fact that 40% of that will be contributed by China and India alone.

If, like a growing number of investors, you are beginning to see the potential in these regions and are considering investing in emerging countries; here are some tips for investing in two of the world's most prospering markets - China and India:

China: There is currently a lot of foreign investment in China. It is an economy that is growing at a rate never before seen on earth. In fact, it is creating wealth faster than any nation has in the past. The fact of the matter is that China is a manufacturing based economy (for now) and has easy access to shipping it's goods to the United States and other international markets. A growing number of investors are discovering that investing in the country's flourishing shipping and manufacturing industries would be a good long-term strategy.

India: The Indian economy is starting to show signs of true stabilization and strong growth. At the moment, India's economic growth is focused more on outsourced labour (i.e. high tech call centres) and IT, than strictly on manufacturing as is the case in China. Although the country's ports have been growing very quickly in recent years, India is still at a geographical disadvantage, given that it is the furthest market from the United States. Albeit India will soon surpass China as the most populated country on Earth, the bulk of it's population is under 44 years old and represents a trend that will continue until about 2030. In comparison, the population of China is getting older and should plateau soon. India's young working population, on the other hand, will continue to drive the country's economy toward long-term growth; fueled by innovation.

If you are considering investing in these two emerging markets, I would advise that you find an asset management firm that understands the markets well, and can clearly explain your options. This is incredibly important because investment rules and opportunities will often vary between regions. Thus, your first step in due diligence of an investment is to find trusted sources of information. Use these resources to identify investment opportunities that stay within your principles for investing, quench your thirst for profits and balance your tolerance for risk.

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