The reason for this question is, there is a strong belief worldwide that these are the emerging economies, with potential to give you the best return on investment, equities yielding about 20-25% average (specific good stocks yielding even 100%+), and debt yielding 8-9%.
If so, what is the maximum you would invest in these countries?
Also, would you like to test the waters initially with a small investment? How much will that be?
What is your risk perception of these markets?
I am invested in both Chinese equities and Indian equities. Sort of foolish not to be in my opinion. But the markets are not what one would wish to risk a great deal. I might have more invested in them than a conservative financial advisor would recommend. It is recommend to limit ones investments in these markets to about 10% of ones equity investments.
India and China are both very volitile. You get taken for quite a ride in them both up and down. I believe the average Indian equity is currently selling at a pe of about 35. Although China has a reputation for very high security prices, I do not believe that most are that high. More in the low 20s.
There are various funds that invest in both India and China. They offer diversification which can mitigate somewhat the risks. For China, TDF, CHN and several others also. For India IIF and INF and also a few others, not so many as China. Also there are various ADRs traded in the U S. CHL is my favorite. Somewhat of a bargain currently after the 12% drop last week.
March 3rd, 2010 at 11:58 am
I am invested in both Chinese equities and Indian equities. Sort of foolish not to be in my opinion. But the markets are not what one would wish to risk a great deal. I might have more invested in them than a conservative financial advisor would recommend. It is recommend to limit ones investments in these markets to about 10% of ones equity investments.
India and China are both very volitile. You get taken for quite a ride in them both up and down. I believe the average Indian equity is currently selling at a pe of about 35. Although China has a reputation for very high security prices, I do not believe that most are that high. More in the low 20s.
There are various funds that invest in both India and China. They offer diversification which can mitigate somewhat the risks. For China, TDF, CHN and several others also. For India IIF and INF and also a few others, not so many as China. Also there are various ADRs traded in the U S. CHL is my favorite. Somewhat of a bargain currently after the 12% drop last week.
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March 3rd, 2010 at 12:41 pm
I have invested in both of these countries through ADR stocks that trade in the US markets. Both seem a little bit expensive right now, but I wouldn’t hesitate to invest up to 10% of my money in each country. Here are my favorite stocks in each country:
http://www.top10traders.com/ViewPortfolio.aspx?userID=13
http://www.top10traders.com/ViewPortfolio.aspx?userID=7
These are from http://www.top10traders.com – this is a free site that lets you create a portfolio with $100,000 in play money and then see how your picks perfrom against other investors at the site.
Hope this helps.
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March 3rd, 2010 at 1:29 pm
Try commodity future
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March 3rd, 2010 at 2:17 pm
iShares has Indian and Chinese index funds with low relative expenses. Compared to two weeks ago now is a good time invest because of the recent drop in prices. What will happen next week is anyone’s guess.
These markets are currently sound LONG TERM investments, but China is a communist country which makes putting money there riskier than India, which is not communist.
Currency fluctuations also play a role in increasing risk as do different accounting standards in these countries.
Returns are possible but they are not for the faint of heart nor the impatient.
Good Luck,
Dana B.
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March 3rd, 2010 at 2:45 pm
Hi!
Many investment banks or boutiques have funds to invest in emerging markets. For instance, MFS, http://www.mfs.com, have the Emerging markets growth fund, the Emerging markets debt fund, and the Emerging markets equity fund.
The minimum investment for the MFS funds, I think, is about 3000 USD. But I am not completely sure. I need, however, to look up for more emerging markets funds.
I recommend you The Economist magazine. There you can find many articles regarding emerging markets risks. Weeks ago, there was a very nice article relating India’s economy (India’s economy: to hot to handle).
I hope this helps.
Best Wishes!
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March 3rd, 2010 at 3:35 pm
I consider the "BRIC" countries (Brazil, Russia, India and China) as risky at this point. They had a great run. I would no longer consider them emerging market as they have been doing well of the last couple of years to integreate themselves into the global economy. Personally, I invest internationally via the JANUS Overseas Fund which has a proven fund manager and track record with relatively low fees. A main China holding is China Overseas Land & Investment.
One thing to keep in mind is that China’s market is still very young. Aditionally, the governement is very restrictive and is constantly changing regulations that affect the profitability of their public companies. With a lot of homework, I am sure you can find an angle.
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