This article (you can find the link below) talks, as the title says, about investing in a foreign country. This article states that most current investors keep on investing, putting money into their own country. This phenomenon isn’t actually that strange. It is normal people will invest in their own country cause they are of course more familiar with it, they are more informed about the development of the country.
Now the thing is, if you inform yourself well, you can actually get more profit out of investing in some foreign countries, than investing in your own. This article states that if you invest in some fast growing countries, you can easily maximize your returns. It says a foreign country possessing the resources and expertise for planned development is poised to generate better returns as compared to matured markets.
For example, the Chinese economy is the fastest growing economy in the world, registering an average growth of more than 9 percent each year. Cause of this, investing in this country could be very profitable if you invest wisely.
While reading this article, it became clear to me you can actually make real big profit by doing almost nothing. I figured out that if you simply trade your own money (like the Euro)for a sum of foreign money (like the Yen) you can make profit. If the value of the Yen rises after a while (and it will rise cause of the growth of the Chinese economy) you can buy Euros again. The amount of Euros will be bigger this time cause the value of the yen has risen. Result; a nice extra sum of money, earned by doing nothing.
Article link: http://www.squidoo.com/Global-and-international-investing
Niels Roels
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investing in another country can be profitable but also dangerous I think. By example when countries start to invest to much money in another country they may get in financial problems themselves.
But investing in a country can be good for that country so that it might be saved from financial problems or going bankrupt.
In my opinion it is normal that current investors keep on investing in their own country because they want to protect their own country against the difficult economic times. For me it is a sort of a protectionist reaction.
On the other hand I understand the managers, who will spread the costs by investing in a fast growing country. Nowadays the wages are much lower in the fast growing countries ( Chine) than in the European countries.
Investing in a foreign country has a lot of advantages for the world economy.
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