Savvy Investors See Opportunity In Political Turmoil Among Emerging Markets

Thursday, February 10, 2011 07:38
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Savvy Investors See Opportunity In Political Turmoil Among Emerging Markets

Tags: emerging markets | world economy

As some investors pull their money out of developing countries hit by food riots and violent political unrest, it’s a good time to look for inexpensive investments in emerging markets.

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Increased risk due to political turmoil is lowering the cost of investing in emerging markets, allowing investors to enter these markets at a low point while counting on the eventual return of stability to produce high returns.
 

Usha Haley, professor of international business at Massey University in Auckland, New Zealand, tells MarketWatch that a classic risk-return trade-off is playing out overseas, noting that “emerging markets are always risky.”
 

She recommends diversifying by choosing several emerging-market plays with varying risk profiles while maintaining some investments in low-risk markets.
 

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