Tag Archives: Offshore investing

Three reasons why you should invest internationally

Analysts are divided on how markets might turn out under the Trump administration. From overhauling the tax code, to repealing the Affordable Care Act and renegotiating trade deals, Trump’s plans can have massive implications for businesses, consumers, and investors. Uncertainty remains high as the new president has never been in public office. In other parts of the world, meanwhile, similar dilemmas exist. The likes of Brexit, Abenomics, the ongoing refugee crisis, and the deceleration of growth in China, among others, are major concerns that can have direct impacts on the various segments of the global economy. As such, portfolios need to be more resilient, adaptable, dynamic, and diverse. Investing internationally, with focus on emerging markets, then becomes a viable option.



  1. Diversification and access to rapidly growing companies

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Stock markets all over the world were not made equal. They behave differently at various points of the economic cycle and across numerous geographic regions. A stock market in Asia might be bullish, but that does not mean that its European counterpart enjoys the same. Investing internationally offers portfolios an additional layer of protection from volatility in individual markets.


Of course, many of the world’s best companies are in the U.S., the U.K., Japan, or Germany, making these markets great avenues to grow money on the long term. However, in some other countries, ‘less known’ businesses are showing great potential into becoming the next Amazon, Volkswagen, or Samsung. These companies are equally innovative but are yet to reach their economic peak.



  1. The potential for higher growth, higher income

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In emerging markets, growth has so far been stronger than that of mature, developed markets. In 2015, Myanmar posted a GDP growth of 7.00 percent, Uzbekistan at 8.50 percent, and Ethiopia a whopping 10.20 percent. By comparison, the United States only grew by 2.60 percent and Japan by 0.60 percent in the same period.


For those investing in bonds, some countries offer much higher interest rates than others. Figures can have stark differences, especially versus developed markets where yields have been pushed down to historic lows, reflected in not-so-impressive income.



  1. Young, dynamic, and educated workforce

Image source: remit.co.uk


Sustainable economic growth is largely anchored on a healthy, educated, and productive workforce. However, as in the case of Japan, the ageing population is making a significant impact on areas such as social welfare, public health, and economic prosperity. The likes of Canada, Germany, France, and many other equally prosperous countries have a median population age of older than 40 years old. This may translate to higher spending on healthcare and increased dependence on the relatively smaller young working population to drive growth.


Newly industrialized countries like the Philippines, Iran, Mexico, and Turkey (who all belong to the Next Eleven Economies) have relatively young workforces, allowing for a potentially more ambitious and energetic manpower. A demographic sweet spot is expected to accelerate economic growth in these countries. To further emphasize just how important it is to have a predominantly young labor pool, many of today’s most successful entrepreneurs are considered millennials—and most of them have great contributions to the rapidly digitalizing world.



The Bottom-line


Investors who limit themselves to investing in just one country are missing out on a world of opportunities. Fortunately, there are offshore financial services companies that can help investors expand their horizons and have access to global markets with relative ease and security. This should make it a lot more convenient for them to tap into new and state-of-the-art investment instruments and boost their portfolio’s potential for robust and sustainable growth.


For more information about international investing, read blogs on LOM Financial.

Emerging markets: Why NOW is the best time to ‘globalize’ your portfolio

China, India, and Brazil have rapidly risen as economic giants over the last few decades, with economies thumping those of the United Kingdom, Germany, Japan, and even the United States (in terms of purchasing power parity GDP). In the next several years, more countries from the developing world will emerge as financial juggernauts, possibly creating new opportunities for international investors to find new green pastures where they could park and grow their money.


Image source: cnbc.com


According to Business Insider, the following countries are set to make significant impacts on financial markets and the global economy as a whole (in no particular order) within the next few decades:



The world’s largest archipelago, Indonesia has for the most part of its history anchored its economy on commodities, such as mineral fuels and lumber. However, such sectors will eventually stagnate and the economy will start capitalizing on services and manufacturing. The economy will also benefit from better infrastructure and a streamlined bureaucracy.



The rapidly urbanizing Egypt will see significant improvements in its real estate sector. Other industries such as tourism, energy, and Information Technology will also skyrocket. The IT sector, most especially, has been stimulated by next-gen Egyptian entrepreneurs strongly supported by the government.



With a huge labor force, extensive arable lands, and one of the largest banking sectors in South Asia, Bangladesh has been listed as one of the ‘Next Eleven’ emerging markets. It will also develop into a global manufacturing hub in the coming years.


Image source: travelbrochures.org



The textile and automotive sectors in Pakistan have seen dramatic growth over the last few years and they aren’t showing any signs of slowing down. Improving domestic energy supply and growing manufacturing investment would also spur further economic progress.



Currently the biggest business process outsourcing (BPO) center in the world, the Philippines will continue to develop into a leading human resources powerhouse. It also posted one of the Asia-Pacific region’s highest GDP growth rates in 2015 and forecasts continue to be positive. Robust private consumption, a booming construction sector, and ongoing business environment reforms are also making the country more conducive for both foreign and local investments.


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