Investors dissatisfied with domestic returns have been seeking greater growth in foreign markets. As noted in last week's article, the growth of emerging markets is not a short-term fad, but a long-term trend that will affect global markets for years to come. The question then, is how you can take advantage of this opportunity without losing your shirt. Read on to find out.
The returns of foreign emerging markets are truly impressive-20%-100% a year or more isn't uncommon. Who wouldn't want to earn 83% in one year like the China index FXI did? Or the 58% it did in 2007! These dramatic returns have caused some investors to throw caution to the wind. They've moved significant portions of their portfolios to these markets only to suffer devastating losses.
That's not what I want for my clients, nor do I want it to happen to you. While the returns are much higher, the risk is also much greater. Unless you have carefully planned how to control that risk then you should leave these markets to the professionals.
Here's the real question. Are you willing to endure losses of 20-50% that can last for months in order to achieve those stellar returns? Most are not. They jump into these markets only to get discouraged and sell after a big decline. The China index (FXI) is down over 30% since its peak in October of 2007. Would you still be hanging on to it?
Daily swings of 5% to 8% are not uncommon for large-cap Chinese stocks. Newer markets, like those in Vietnam, can take huge dives very quickly. Governments, along with their financial regulations, can change overnight. Growing pains are common for developing markets and those with the stomach to handle the wild ride can be richly rewarded. Clearly, investors have to match their foreign exposure to their appetite for risk.
Investing in emerging markets is not for the faint of heart. That doesn't mean that you shouldn't do it. Start small by only investing a couple of percent of your overall portfolio. Then you need to decide the method of investing that is best for you.
There are several ways you can invest in foreign and emerging markets. You can buy individual stocks on the foreign exchange. You can buy foreign companies that are listed on U.S. exchanges. There are exchange-traded funds (ETFs) for just about every country and/or region. There are mutual funds. You can buy bonds as well as stocks.
I only recommend buying stocks on a foreign exchange for advanced, sophisticated investors. This isn't as hard as it used to be thanks to online brokerage firms, but is still pretty involved. First, the markets like the Hong Kong exchange are located half-way around the world. That means their market is open while it's nighttime here. Second, you have to convert your money to the local currency prior to making a purchase.
It's much easier to buy large foreign companies that trade on U.S. exchanges. Doing so isn't any different than buying any other U.S. stock. Some of these companies trade on the pink sheets. If you go this route, beware of the daily trading volume and the spread (the difference between the bid and ask price).
Good quality mutual funds are perhaps the most popular way to invest outside the United States. There are too many choices to list here and doing your research before you invest is crucial. Some have active management, while others are more passive. Some focus on specific markets while others are more general in nature. Fees can vary widely as well.
No matter how you invest, one major risk to consider is currency risk. When the U.S. dollar is falling, foreign returns benefit. When the dollar is rising, however, foreign returns suffer. This means your return can either be wiped out or greatly boosted, depending on what the currency markets are doing.
While the superlative performance of emerging markets is long term trend, many tactical decisions will need to be made along the way. There are simply too many changes in the governments, rules and regulations and the economies themselves to just set it and forget it. Professional management can add significant value and help you take full advantage of the opportunities that are available.
List Of Emerging Markets
I often wonder WHY online marketers only do one thing... advertise online! And the most common reason is cost. Advertising Online is generally cheaper than offline marketing. But if you know where to look (like in the newspapers), it won't cost much if you tapped into emerging markets. This article will offer tips on where and how to find the most affordable newspaper advertising slots around the world at a fraction of what you would normally pay for a small classified lineage ad; and how to capitalize on a gap left wide open by other network marketers.
Granted, advertising in the newspapers is in most cases more expensive than advertising online, but then the difference between the two in terms of response is that, visitors you get off a newspaper actually have to type your web address into the browser... hence they are more likely to stick around to find out what your site has to offer. Whereas, visitors who arrive off generic search engine results and even Pay Per Click ads like Google AdWords, Yahoo! Overture and so forth, usually have the attention span of a two-year-old (please excuse the expression), so unless your site REALLY grabs them, they will be clicking on to the next site and then the next. They just don't have the time. That said, newspaper advertising doesn't have to be costly. I spend under $10 for a lineage ad in a daily ... and that's for an ad that runs for 30days! I know, astonishing isn't it?
If you're involved in a network marketing business that has a global presence, you should be able to benefit from newspaper advertising campaigns in emerging markets. The advantages of working with emerging markets, in most cases, is that advertising rates there are by far more affordable than in the West. But for this to work, your opportunity needs to be free to join (at first, at least); and once you've built that trust, the money will come. In my case, I first conduct a search on my company site to see how many people are joining the company and from which countries every month. I keep a record of that on text file. I then compare that with the list of countries my company accepts credit cards from.
What I look for is countries where the sign-up rate is low. In other words, where we don't have a lot of new affiliates joining the company from. I also look for countries where our company accepts credit cards from. Why? Because it makes it easier to grow my business in such territories. Now if your MLM doesn't provide you with these statistics, I'd say use the search engines to research the developing countries you want to penetrate. Find out as much as you possibly can...like get into the demographics. See the sort of websites they have in that country. The job market, I find, is a good place to find out what people are seeking in terms of work, and perhaps whether or not there is high unemployment. You want an over-skilled underpaid type of demographic to make this work. And then of course, do they have locally issued credit cards that are internationally accepted? And don't forget to check with your MLM company to find out whether they do accept credit cards from the country in question. That's it. Research done, get to work!
Write to local newspapers, tell them who you are and what you do, and ask them to send you a quote for the lineage ad you want to run. Please remember to include a sample of the ad with your letter. Ask what forms of payment they accept: e-Gold, PayPal, Credit Card, Wire Transfer, Money Gram, Western Union... but if you're going to use a credit card, make sure you ask them to provide you a link over a secure server where you can input your credit card details. DON'T send your credit card details by email, fax or over the phone. Just don't!
Summary: Advertising online is great, and in most cases, if you're smart, the cost of advertising online is negligible. So I think it is safe to say that because it is affordable most Internet Marketers would opt for marketing their businesses online. The only trouble with surfers is that their attention span is very limited. It is usually a case of browsing from one site to the next at the blink of an eye... which can be fun for the surfer (getting to see all these websites) but it sure as hell can't be fun for the website owner. Why? Because if you visit my site I would want you to stick around to either buy something or sign-up for my newsletter or program. Right? That said, newspaper advertising, although generally perceived as overpriced, is not so in emerging markets. However, for a network marketing opportunity, getting into the right demographic group AND country is key to breaking into emerging markets through newspaper advertising.
Both Jeffrey Voudrie & Anthony J. Namata are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Jeffrey Voudrie has sinced written about articles on various topics from Financial Planning, Investments and Health Insurance. Nationally-syndicated financial columnist and Certified Financial Planner(R) Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA.Read more at. Jeffrey Voudrie's top article generates over 165000 views. to your Favourites.
Anthony J. Namata has sinced written about articles on various topics from Internet Marketing, Debt Reductions and Writing. Anthony J. Namata is a successful Internet Marketer and author of and his popular online journal. Anthony J. Namata's top article generates over 49500 views. to your Favourites.
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