If you are looking for an alternative to equities, this is undoubtedly the one constituted by emerging markets. It is not the most common to operate in the purchase and sale of shares on the stock market. But if you open positions at the right time it can be the most profitable because it has a broad upside potential. Although in any case without forgetting that you assume a series of very high risks that can make you leave many euros on the way. Not surprisingly, if you do not have enough experience it is really very dangerous since its volatility is frankly higher than in the more traditional equity markets.
Of course the investment in emerging markets it can be a solution when in the stock markets of the most industrialized countries the uptrend has been exhausted. In this sense, they play the role of a complementary market in which you should not make large monetary contributions. If not, on the contrary, the amounts will be minimal as a formula to protect you from unexpected movements in these very special financial markets.
But you should know that in emerging markets there are many proposals and not all of them are the same. Because they come from countries as diverse as they can be China or India. With very diverse results, as you can see from now on. While in some the rises are really spectacular, in others the falls are generated with special virulence as is happening at this precise moment. It is one of the reasons why you should act with special caution if you are going to open positions from these next few days.
Emerging markets: China
If there is a clearly bullish equity market right now, that is undoubtedly the one represented by China. It is certainly the one that is most bullish of all since in the first months of this year it has appreciated just over 10%. Leading the emerging stock markets and to the point of becoming one of the great buying opportunities at the moment. Although the doubt is configured as to how far this upward trend is going to continue. However, everything seems to indicate that this momentum may still last for the remainder of the year. Where, the buying force is very strong, taking advantage of the weaknesses of the remaining equity markets.
From this general scenario, the China stock market is one of the greatest business opportunities you have at the moment. Among other reasons, because the remaining financial markets are not behaving as expected by small and medium investors. To the point that a very powerful monetary flow is being diverted towards this very special geographical area. You can carry out operations through the purchase and sale of shares, but also through other safer financial products. For example, investment funds based on this Asian market.
Advantages of investment funds
Investing in the Chinese equity markets through this investment model entails a series of advantages that you should know from now on. One of the most important is that you are in a position to diversify your investments more effectively. On the other hand, you cannot forget that this investment can be combined with other financial assets. Not only from equities, but also of the fixed in which the investment funds known as mistos are constituted. And that they are aimed at a more moderate or conservative investor profile who needs greater protection in the invested capital.
This class of investment funds have the advantage that they are increasingly counting on a more powerful offer from the management companies that market them. To the point that you will not have excessive problems to channel your demand correctly. From very aggressive funds to others that are more defensive and that are in the proposals of all financial intermediaries. Of course, these funds are a vehicle to channel this demand so original that it is destined for the Chinese markets. Above the benefits that other financial products currently offer you
Demand in India slows
If there has been an emerging market that has stood out above the rest in recent years, it is undoubtedly the Indian stock market. With very spectacular revaluations and that have made millionaires to some small and medium investors. However, this trend has broken during the first half of 2018 and has turned around. To the point that it is already in negative territory when depreciating around 5%. In any case, it is not very clear if it is a very deep correction in this stock market or if on the contrary it is due to a change in trend, as pointed out by a large number of financial analysts.
The stock market in India currently offers many risks and that they are not convenient to face them because there is a lot of money that you can leave on the road if you open positions. Another very different thing is how the evolution of this financial market may be in a few years. But of course, the short-term scenario could not be more discouraging. These positions must be absent until the end of the year as other equity markets are more suggestive for investment.
Latin American markets continue
The position of the stock markets in this geographical area is not good either. Partly due to the economic problems in a large part of their countries. For example, Brazil and Argentina where its most relevant indexes have fallen by around 10% in the first half of this current year. From this scenario, other financial markets are what you have to be out of until the end of the year. Risk is also very powerful and you have little to gain from opening positions in some of its most important indices.
Not only are Brazil and Argentina not the countries most affected. Rather, those in this geographical area are affected and do not go through the best of times. It will take many months or even years before they become profitable again. Nevertheless, is one of the most volatile in the world with a very important difference between their maximum and minimum prices. And that makes it very difficult for you to have a more or less stable portfolio of securities. Therefore, it is not one of the most recommended from now on. Beyond other technical considerations and maybe even from a fundamental point of view.
Russia may be the surprise
In any case, one of the possible surprises for the end of the year is the Russian stock market. For now has a revaluation close to 4%. That can be strengthened in the months that remain before the end of the year. One of the reasons to explain this action is due to the revaluation in the price of oil. Not surprisingly, this important equity market is closely linked to this raw material and above the rest of the stock markets. From this scenario, it is not a bad idea to open timid positions on the Slavic stock market. Not surprisingly, its revaluation potential is one of the most important that you can find from now on.
It is true that is dominated by oil companies, but also others related to gas or other kinds of energies. One of the options that you have at hand is materialized through investment funds and that can be very interesting to improve the account of your results in the savings account. But never in an aggressive way, but little by little and with some caution to avoid unwanted scenarios by a large part of small and medium investors. In any case, it is one of the options on the stock market that you should evaluate to make the savings profitable in an efficient way.
Other European Stock Exchanges
On the other hand, there are also other countries in the Slavic orbit, but which are integrated within the euro zone and which involve a much more controlled investment. They are represented by bags like those of Hungary and Poland that can have very positive results from now on. Assuming less risk than in emerging equity markets and that at the moment their indices maintain margins at their levels very similar to those of Western stock markets.
With the advantage that it has the same currency as yours, the euro. In this way, you will not have to change the currency with the consequent expense in commissions for this concept. In addition, their volatility is much more controlled than in emerging markets because they are included in the common European space. You should at least value this alternative offered by the financial markets. With the possibility of improving your interests from now on.