While the United States investment pattern is seemingly limited to American soil, across the way in Europe the focus is more on the emerging market. For those considering investment from Europe, the focus is more on emerging markets, such as Asia and Africa. Rather than putting money into established economies, companies are investing in developing countries which taken in more foreign direct investment.
China is the top of the list of the top five receiving investment, which will come as no surprise to some. The others on the list include Brazil, Russia, India and South Africa, as their multinational companies become more successful and more prominent on a world scale. Foreign direct investment increased by a whopping 7% to Asia in 2012, bringing the total to €407 billion. Countries thought to be making an increase in the near future are Cambodia, Myanmar, Vietnam and the Philippines.
So how does this affect your choices for investment? Although in the previous post “Investment Trends in the United States” talked about what to invest in on our home shores, it might be worth taking a look at oil from Brazil, or agricultural companies taking advantage of Latin American resources. Emerging markets offer greater growth, though of course they also offer the higher rate of failure given the countries’ relatively new and unstable economy. Experts think that investing some money into these markets is wise, but to exercise caution as these tend to suffer more in the short term. That being said, these markets tend to outperform in the long run as they are an untapped source of investment gain.
For example, the Indian stock market is looking quite favourable, and with little demand from developed economies such as the United Kingdom and its investors, it is ripe with potential. However, with its recent bad press, stocks may fall in price if the world’s negative reaction does not improve. Of course, the United States is still a good option for investment. Foreign companies invested well over $160 billion into the United States last year, proving the dollar is still a very strong currency. However, China and Hong Kong followed shortly behind, with $121 billion and $75 billion respectively. It is worth taking these figures into account when considering investments, as the sums definitely do add up to some serious gains on investments.
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