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Using Emerging Markets to maximise the potential of your money
By admin | August 10, 2011
Maximising the potential of your money has always been important, but never more so than right now, when standard interest rates are at an all-time low and have recently been kept at 0.5% by the bank of England. Knowing what to invest in can be tricky, with so many different types of investment available such as cash ISAs, short and long term bonds, new technologies and shares. Investing in emerging markets is one of the best ways to maximise your money’s potential at a relatively low risk. Here’s how it works and what to do.
Emerging markets are a wise investment because, in the simplest of terms, they are still growing and expanding. In 2010 the UK’s annual growth in GDP was 1.5%, whilst the two biggest emerging markets, China and India, saw 10% and 8.75% respectively. It is this growth that means the markets are emerging, and as they emerge (or grow) their economies grow with them. Since the 2008 recession established markets have struggled to recover, whilst the emerging markets have recovered at a much faster rate, and are now in a period of sustained growth.
So you may be wondering whether investing in emerging markets is the right step for you. If you already have an investment portfolio then an investment in emerging markets is a good way to diversify your existing collection of investments and inject some capital into an area which could see larger growth than the equivalent investments in established countries would see.
If you’re unsure about exactly what such an investment may entail then you can check out more detailed information with the investors themselves, as you’ll need a company to invest on your behalf. You can search online for companies that offer an easy to understand service for investing in emerging markets. You can invest as little as a £500 lump sum or spread your investment over monthly instalments from £50 per month to suit your particular needs.
You should bear in mind that no investment is risk free and that an investment in emerging markets will act like an ISA, and therefore you should see such an investment as a long term thing. The potential to make good profit is there, but don’t expect to see £1 turn into £1000 overnight! And of course the investments will, as they’re abroad, be in non UK currency. This means that if the strength of the pound falls then your investment may lose value as it will be converted back to UK currency when you withdraw your final balance. Other than that the signs are exciting as emerging markets continue to grow and grow, meaning if you’re interested there really is no time like the present.
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