Worst emerging markets

Investing Pictures, Images and Photos
When looking at investing in countries that are considered to be ‘emerging markets’, there are many to choose from. These countries are generally looked at as investment opportunities because they are developing and slowly becoming advanced economies. These countries don’t necessarily have the most stability, yet they have a higher average return on investment. When you invest in countries like the U.S. and Canada for example, you can sleep easy at night knowing it’s a safe bet, but you also will likely not see a very high return on your investment because it is so safe.

Also, by investing in emerging markets like Brazil, China and many others, you are anticipating the huge potential for growth that they have and want in on the money that will bring in the future. However, as the title of this post indicates, not all emerging markets are equal in how good they are for investments. As a recent article from the Financial Post reports (click here to read it), citing a study by MSCI, Egypt is the worst of all the emerging markets this year. It should not come as a surprise to anyone since they just kicked out their dictator after decades of poor economic management. Perhaps this will change for them in the future but, only time will tell.

Although Egypt is an obvious statistic, the second worst performing emerging market will probably surprise many people. It is India. This is a country that is often talked about as being the next big thing after China. It has the second largest population in the world and is the world’s largest democracy. Yet, issues like poor infrastructure, corruption and inflation all plague the slowly growing economy. To me this says that India should still be looked at as the next big thing after China, however, it may take longer than previously thought.

These issues will work themselves out with time and better management from their government. India has many advantages over other countries such as that massive population, knowledge of the English language and that they are an actual democracy. I would not let their current laggard status stop me from investing there. I would perhaps take it into consideration though and be more selective in how I invest and at what pace.