Investing Of Foreign Stock Markets

1430 Words May 11th, 2015 6 Pages
Investing in foreign stock markets can be a challenging way to balance a portfolio, though the outcomes can often be rewarding. Investors that do get involved have the opportunity to participate in the long-term growth prospects of many emerging markets. Successful investing requires that one understands the risks of investing in these types of markets. Successful investors know what these obstacles are and devise strategies to overcome them to provide their portfolios with greater returns. Foreign stock markets have some common risks like “lack of transparency, currency risk, volatility, and finding ways to buy in these markets.” (Investing In Mexico) Mexico is a good example of these issues, recent altercations with drug cartels around the country have made many foreign investors rethink before investing. However, when you look at Mexico’s stock market and stock index we see its economy is steadily increasing even with all these problems. Companies like FEMSA are great companies to invest in today’s Mexican economy due to recent positive structural reforms made during the current presidential term, it being the world 's 8th tourist destination, and its geographical location which forms a bridge between North America and Latin America.
Investing in any foreign country comes with certain risks. There is the strength of the country’s currency to consider, the health of its economy, its openness to foreign investment, its relative political stability, and the transparency of…
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